Page 32 - Bullion World Volume 02 Issue 08 September 2022
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Bullion World | Volume 2 | Issue 09 | September 2022
ETF
News
BIS: Gold Jewellery Gold ETFs Log Rs 457 Crore
Hallmarking Recorded Outflow in July
Notable Surge
Gold Exchange Traded Funds (ETFs) witnessed a net
outflow of Rs 457 crore in July as investors parked
The Bureau of Indian Standards (BIS)
their money in other asset classes as part of their
announced that the mandatory hallmarking
portfolio rebalancing strategy. This was in comparison
requirement which came into force in mid-June to a net inflow of Rs 135 crore in June, data with the
this year has witnessed huge success. There Association of Mutual Funds in India (Amfi) showed.
has been a notable surge in the volume of
hallmarked jewellery items, it said. Kavitha Krishnan, Senior Analyst Manager Research at
Morningstar India, said that significant outflows seem
Around 3.7 crore jewellery articles were to have risen out of investors’ expectations of a rising
hallmarked during the initial quarter (April-June interest rate cycle leading to a fall in gold prices, thus
’22) of the current fiscal year. Also, nearly 8.68 impacting the net flows into the gold ETFs. Also, a
crore jewellery articles were hallmarked in the falling rupee is another factor that has likely impacted
the demand and supply dynamics of gold. This trend
previous fiscal year ended 30th March, 2022.
has been witnessed globally too, with gold ETF’s
The statement further noted that the number
posting significant outflows on the back of lower gold
of BIS registered jewellers have surged higher
prices, she added.
significantly from 43,153 in July last year to as
many as 1.43 lakhs in August this year. Over
“This outflow could be directed toward money being
the same period, the count of BIS-recognized diverted from gold to other asset classes as a part of
Assaying and Hallmarking Centres have a portfolio rebalancing strategy," Priti Rathi Gupta,
increased from 948 to 1,201. Founder of LXME, said. The outflow has pulled down
the asset under management of the category to Rs
The first phase of mandatory hallmarking had 20,038 crore last month from Rs 20,249 crore in June.
covered 14 carat, 18 carat and 22 carat gold
jewellery articles. The second phase covered However, the category saw a slight increase in the
additional cartages-20carat, 23 carat and 24 number of folios by over 37,500 to 46.43 lakh during the
carat. Also, it covered more number of districts. period under review. This suggests that investors are
likely continuing to invest in gold ETF’s as a means to
Several more districts would be covered under
diversify their portfolio and hold the financial instruments
the mandatory gold hallmarking order in future.
a hedge against market risks, Krishnan said.
The mandatory hallmarking ensures purity of
So far in the current fiscal (till July) 2022-23, the
gold purchased by customers. It also offers
segment attracted Rs 982 crore. Gold ETF, which aims
them higher resale or exchange value for gold to track the domestic physical gold price, are passive
jewellery and artefacts. investment instruments that are based on gold prices
and invest in gold bullion.
Source: https://www.scrapmonster.com
In short, gold ETFs are units representing physical gold
which may be in paper or dematerialised form. One
gold ETF unit is equal to 1 gram of gold and is backed
by physical gold of very high purity. They combine the
flexibility of stock investment and the simplicity of gold
investments.
Source: https://www.news18.com
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