A story I wrote, for the media company I work for presently, last week on gold ETFs & gold saving funds outperforming all other mutual fund categories, year to date, as equity markets waver & bond yields continue to rise
Gold MF schemes outperform other equity, debt schemes in last 2 months
Returns from gold saving funds and gold exchange traded funds have seen an uptick in the last few months on the back of a traction in the price of physical gold in the London bullion market.
This has coincided with the recent decline in equity market and rise in bond prices. And, as a result, the gold funds category has outperformed equity and debt fund categories so far this calendar year.
The year-to-date return of the gold saving funds category stood at 4.1% as of Feb 21, according to data from Value Research. This was significantly higher than 0-1% returns delivered by fund categories such as liquid funds, ultra short term debt fund and credit opportunities debt funds.
Equity fund categories have been in the red in year-to-date performance, with equity multi cap funds down 4.6% and equity large cap funds down 2.6%, the data under review showed.
The outperformance of gold saving funds has come on the back of gold ETFs touching one-year high in the last one month.
HDFC Gold ETF, for instance, touched a one-year high on Feb 16, while Reliance Gold BEEs touched a one-year high on Jan 25.
Domestic mutual fund schemes investing in gold include gold exchange traded funds. Gold saving funds do not invest directly but instead invest in the units of domestic gold ETFs.
Gold ETFs are designed to mimic the price performance of physical gold in the London bullion market, carrying only the risk of foreign exchange rate fluctuations.
On the London bullion market, the gold price touched a one-year high of $1,360.25 an ounce on Jan 25. Since then, it has shed some of the gains, but the positive effect on the performance of gold ETFs tracking the gold prices has remained.
Gold prices have risen on the back of buying in two largest gold markets in the world--India and China. In January, India was loading up gold in preparation of the ensuing wedding season and China was readying for the lunar new year, said Chirag Mehta, fund manager of Quantum Gold Fund at Quantum Asset Management, in a monthly outlook note to investors.
"In times of geo-political risks, weakening dollar or impending Fed rate cuts, gold has been perceived to be a safe haven currency," Abhishek Bisen, fund manager at Kotak Mutual Fund told Cogencis.
The dollar index's recent nosedive to 88 mark led to sharp spike in commodities in general, and gold benefitted from the same and became one of the best performing asset classes in last three month, said Bisen, who manages Kotak Gold ETF.
The outperformance of gold saving funds in the last two months follows a year-long period when it was underperforming almost all the fund categories during last year.
As calendar 2017 ended, gold saving funds had turned in annual returns ranging from 2.3% to 3.9%. In contrast, equity multi-cap funds delivered annual returns ranging from 25% to 51%, and short term debt funds' annual returns came in between 5.2% and 9.4%.
Gold prices in London bullion market had a golden run in 2010-2012. Around half the gains seen in this period were erased in 2013-2015. In 2016, gold prices rebounced again for a short while.
The table below lists the returns from different mutual fund categories as of Feb 21:
YTD 6-month 1-year
--- ------- ------
(in %)
-------------------------
Gold funds 4.1 4.5 2.2
Debt: Liquid 0.9 3.2 6.5
Debt: Ultra ST 0.9 2.9 6.4
Debt: Credit Opp. 0.7 2.3 7.1
Debt: Short Term 0.6 1.8 6.1
Debt: Income -0.1 0.0 4.9
Debt: Dynamic Bond -0.6 -1.1 3.6
Debt: Gilt -1.6 -3.6 2.0
Equity: Large Cap -2.6 5.9 16.4
Equity: Multi Cap -4.6 7.3 18.6
Equity: Small Cap -6.1 15.7 30.7
Equity: Mid Cap -6.2 8.7 20.9
YTD: year to date
https://twitter.com/JournalistRGaj/status/968003436896751616
Gold MF schemes outperform other equity, debt schemes in last 2 months
Returns from gold saving funds and gold exchange traded funds have seen an uptick in the last few months on the back of a traction in the price of physical gold in the London bullion market.
This has coincided with the recent decline in equity market and rise in bond prices. And, as a result, the gold funds category has outperformed equity and debt fund categories so far this calendar year.
The year-to-date return of the gold saving funds category stood at 4.1% as of Feb 21, according to data from Value Research. This was significantly higher than 0-1% returns delivered by fund categories such as liquid funds, ultra short term debt fund and credit opportunities debt funds.
Equity fund categories have been in the red in year-to-date performance, with equity multi cap funds down 4.6% and equity large cap funds down 2.6%, the data under review showed.
The outperformance of gold saving funds has come on the back of gold ETFs touching one-year high in the last one month.
HDFC Gold ETF, for instance, touched a one-year high on Feb 16, while Reliance Gold BEEs touched a one-year high on Jan 25.
Domestic mutual fund schemes investing in gold include gold exchange traded funds. Gold saving funds do not invest directly but instead invest in the units of domestic gold ETFs.
Gold ETFs are designed to mimic the price performance of physical gold in the London bullion market, carrying only the risk of foreign exchange rate fluctuations.
On the London bullion market, the gold price touched a one-year high of $1,360.25 an ounce on Jan 25. Since then, it has shed some of the gains, but the positive effect on the performance of gold ETFs tracking the gold prices has remained.
Gold prices have risen on the back of buying in two largest gold markets in the world--India and China. In January, India was loading up gold in preparation of the ensuing wedding season and China was readying for the lunar new year, said Chirag Mehta, fund manager of Quantum Gold Fund at Quantum Asset Management, in a monthly outlook note to investors.
"In times of geo-political risks, weakening dollar or impending Fed rate cuts, gold has been perceived to be a safe haven currency," Abhishek Bisen, fund manager at Kotak Mutual Fund told Cogencis.
The dollar index's recent nosedive to 88 mark led to sharp spike in commodities in general, and gold benefitted from the same and became one of the best performing asset classes in last three month, said Bisen, who manages Kotak Gold ETF.
The outperformance of gold saving funds in the last two months follows a year-long period when it was underperforming almost all the fund categories during last year.
As calendar 2017 ended, gold saving funds had turned in annual returns ranging from 2.3% to 3.9%. In contrast, equity multi-cap funds delivered annual returns ranging from 25% to 51%, and short term debt funds' annual returns came in between 5.2% and 9.4%.
Gold prices in London bullion market had a golden run in 2010-2012. Around half the gains seen in this period were erased in 2013-2015. In 2016, gold prices rebounced again for a short while.
The table below lists the returns from different mutual fund categories as of Feb 21:
YTD 6-month 1-year
--- ------- ------
(in %)
-------------------------
Gold funds 4.1 4.5 2.2
Debt: Liquid 0.9 3.2 6.5
Debt: Ultra ST 0.9 2.9 6.4
Debt: Credit Opp. 0.7 2.3 7.1
Debt: Short Term 0.6 1.8 6.1
Debt: Income -0.1 0.0 4.9
Debt: Dynamic Bond -0.6 -1.1 3.6
Debt: Gilt -1.6 -3.6 2.0
Equity: Large Cap -2.6 5.9 16.4
Equity: Multi Cap -4.6 7.3 18.6
Equity: Small Cap -6.1 15.7 30.7
Equity: Mid Cap -6.2 8.7 20.9
YTD: year to date
https://twitter.com/JournalistRGaj/status/968003436896751616
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