Growth Of Gold ETFs Attracting Investors During Geopolitical Uncertainties: Check Returns

Gold Exchange Traded Funds or Gold ETFs are units of gold that are issued according to the price of the yellow metal in the domestic markets. There will be no exit or entry load in gold ETF investment, which is quite an attractive deal for investors. You can buy or sell the gold ETFs like other equity ETFs in the markets, any time.

In India, SBI Gold ETF, HDFC Gold ETF, ICICI Prudential Gold ETF, UTI Gold ETF, Axis Gold ETF are some of the top gold ETFs considering their market capitalizations. These are also rated funds by reputed rating agencies.

Returns from the gold ETFs in the past 1 year

Gold ETF	1 year return
ICICI Prudential Gold ETF	20.70%
SBI Gold ETF	20.80%
HDFC Gold ETF	20.60%
UTI Gold ETF	20.50%
Axis Gold ETF	20.60%

According to World Gold Council (WGC), "Global gold ETFs drew net inflows of 35.3t (US$2.1bn, 1.0% of AUM) in February." This trend even improved in March as the global political tensions were helping gold markets to boom. As safe-haven gold rates gained sharply and investors are now flocking towards gold. The yellow metal has proven its importance. But the gold ETFs and Gold mutual funds remained the two most preferred choices by investors.

Affirmative flows of gold ETFs were almost evenly split between North American and European funds, continuing the year-to-date growth in Western markets. But this flow outweighed the Asian markets. Internationally, net inflows of gold ETFs were driven by high inflation and a surge in geopolitical uncertainties regarding the Russia-Ukraine crisis. In this backdrop, gold prices surged significantly, which led to massive considerable returns from gold ETFs.

Additionally, WGC informed, "Comex net positioning and inflows into gold ETFs were also supported by this risk-off sentiment. Net positioning in gold futures jumped to US$56bn (904t) in the week ending 1 March, the highest level since July 2020. Gold ETFs continued to see inflows throughout the month, with AUM rising US$2bn (35t). These inflows were almost evenly split between the USA and European-listed funds."

Considerably, in India, the Assets under management (AUM) of the digital gold investments in 2021 increased by 27% since the inception of the year. With the popularity of digital gold investments like gold ETFs, this year, the improvement is expected to be much higher. The boom in the gold market is directly related to that.