Gold ETFs see April outflow on profit booking

Investors remained bearish on gold exchange-traded funds (ETFs) in April, as they pulled out Rs 69 crore from this instrument mainly on account of profit booking. However, Quantum AMC Senior Fund Manager (Alternative Investments) Chirag Mehta believes that investors may come back on the buying side if the positive returns on gold sustain over next few months. The trading in the Gold ETF segment has been tepid in last three financial years. The funds witnessed an outflow of Rs 903 crore, Rs 1,475 crore and Rs 2,293 crore in 2015-16, 2014-15 and 2013-14 respectively. The pace of outflow, however, slowed down in the 2015-16 fiscal ended March 31, as against the preceding two years on account of sluggish equity market. "The continuation of outflows from Gold ETFs despite a sharp rally in gold prices may likely be on account of investors booking profits," Mehta said. "Retail investors usually want to see some sustainability of positive returns may be over a year or so to convince them to buy," he added.