Mumbai: Investors continued to shy away from gold funds offered by mutual funds and are parking their money in equity and debt schemes as the upbeat sentiments in the secondary market and the possibility of further rate cut by the Reserve Bank of India have made equity and debt schemes more attractive from a long term perspective.
According to the data released by Association of Mutual Funds in India (AMFI), gold exchange traded funds registered their sixth consecutive quarter of fall in their assets under management (AUM) as the yellow metal remained subdued due to improving global economic growth and rising dollar.
The category’s AUM fell 2.53 per cent or 181 crore to Rs 6,997 crore due to persistent outflows marked to market losses. As compared to this equity funds and debt schemes registered strong performance helping the industry post its sixth consecutive quarter of growth, taking the total assets under management (AUM) to Rs 11.89 lakh crore.
“For the fiscal ended March, the industry posted an increase of 31.3 per cent or Rs 2.83 lakh crore in AUM — the fastest run-up since AMFI started declaring quarterly average assets in September 2010. Growth in the latest quarter was driven primarily by a surge in equity assets, though a slide in fixed maturity plans (FMPs) and gold exchange traded funds (ETFs) capped the gains,” rating agency Crisil Research said.
“Investors are under-invested in equities. The falling global commodity prices, a downtrend in interest rate cycle and improving macro-economic fundamentals have made equities more attractive from a longer-term perspective. Similarly, the possibility of a rate cut by RBI on April 7, has made long duration debt funds more attractive for investors,” said Gopal Agrawal, head of equity, Mirae Asset Global.
