Gold ETF asset base gains 12% in September

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Mumbai, Oct. 14 The five listed Gold ETFs saw their asset base increase by 12 per cent in September as the rupee depreciated and investors shied away from stocks.

Their shares gained more than 19 per cent from a month ago (to date) period, when the Sensex and the Nifty lost 19.57 per cent and 17.45 per cent respectively.

The total asset base of the ETFs jumped to Rs 727 crore as on September 30, 2008 from Rs 650 crore a month ago, while the mutual fund industry recorded a decline of 2.8 per cent in its assets under management (AUM).

The total gold collections of the ETFs rose by two per cent. As on September 30, 2008 total collections by the ETFs stood at 5.85 tonnes, marginally higher than the 5.75 tonnes collected in August. In August, when AUMs rose marginally, the collections rose 14 per cent.

“Since the rupee depreciated a lot in September it had a positive impact on the price of gold, and we saw AUMs increase more than the actual collections of gold,” said Mr Devendra Nevgi, Chief Information Officer and Chief Executive Officer of Quantum Asset Management.

The rupee depreciated six per cent in September.

The underlying gold collection has not increased as much as the AUM because of the rise in spot gold, which shot up 11 per cent in September, to Rs 13,200 for ten grams, explained Mr Shailendra Kumar, Head- Commodities Research, Sharekhan Ltd.

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(This article was published in the Business Line print edition dated October 15, 2008)
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