ETFs holdings fall; investors reshuffle portfolio after upbeat US economic indicators

Posted By: Religare
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ETFs holdings fall; investors reshuffle portfolio
Better-than-expected economic data released by the US including lowest jobless claims since April 2008 and increased consumer confidence index in December month has seen investors reshuffling their portfolios.

The investors are reducing their holdings of exchange-traded fund (ETFs) due to signs of recovery in US economy, which was reflected in the improved investors' sentiment in the US markets on Thursday.

The decline in ETF holdings shows the diversion of portfolio of investors towards equity based and other instruments as Bullion-backed ETF holdings, which reached an all-time high of 2,360.81 metric tons on December 14, falling to 2,329.921 tons on Thursday.

Further the holdings of SPDR Gold Trust, which is world's largest gold-backed exchange-traded fund, slipped by 1 per cent from a day earlier to 1,254.57 tonnes, the lowest since early November. Such data clearly indicates the outflow from ETFs. Exchange traded funds has witnessed an outflow of 25 tonnes in past two sessions, which is half of the total outflow for this month so far.

However, uncertainty still persists in market as gold has now started behaving like the riskier assets. Currently, the precious metal is trading steady on the bourses as the traders are waiting the moves of hedge funds.

The big fund managers are again moving towards improving equity market to post returns from ETFs.

US jobless claims data dropped by 4,000 to 364,000 last week and the consumer sentiments for the month December increased to 69.9 from 64.1 at the end of previous month.

Dion Global Solutions Ltd

Read more about: economy, gold, metal, exchange traded fund
Story first published: Friday, December 23, 2011, 22:30 [IST]
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