Gold Rush 2.0: Corporates strike it rich in ETF bonanza
Live Events
Inflation, risk hedge
Tax tweaks
(You can now subscribe to our
(You can now subscribe to our Economic Times WhatsApp channel
Gold has been the traditional store of value for the ordinary Indian saver over centuries. Corporates, too, are now big investors in the safe-haven asset—rather, its paper derivative—and have an increasingly dominant share in gold exchange-traded funds (ETFs).Over the past five years, through which the value of gold per troy ounce surged 86% in dollar terms, corporate assets under management (AUM) in gold ETFs has climbed at a rapid 55% annually, reaching ₹36,154.5 crore by March 2025, showed Value Research data.Their share of total Gold ETF AUM has climbed to a record high of 61.4%—from 50% in March 2020.By contrast, retail investors saw their share in the AUM more than halve—to 7.5% in 2025 from 16.1% in 2020. However, the number of retail folios jumped 37% year-on-year in 2025 to about 6.8 million, while their AUM climbed 39% to ₹4,440 crore through the year that witnessed the biggest price increase for the safe-haven metal on institutional buying globally.Corporate investors include companies, family offices, trusts, and other organisations. Their growing participation is in the wake of the record-breaking rally in gold prices in the past year.Generally, corporate entities prefer investing in money market funds/liquid funds due to high liquidity and low risk. Liquid funds do not charge any entry or exit load, facilitating easy cash management. However, they are also looking at gold ETFs as a part of diversification of their investments as it is easier to hold gold in paper form.'They (institutions) are now more actively allocating to gold as part of diversified strategies aimed at managing risk and preserving capital,' said Vikram Dhawan, Head of Commodities and Fund Manager at Nippon India Mutual Fund. 'This shift reflects growing institutional confidence in Gold ETFs as an efficient and transparent vehicle for accessing bullion exposure within a regulated framework.'Gold prices crossed ₹1 lakh per 10 grams in June 2025, driven by safe-haven demand amid geopolitical tensions. At the end of March this year, 24-carat gold was priced at ₹89,000 per 10 grams, up nearly 30% from ₹69,000 a year earlier.A part of the corporate contribution to the total gold ETF AUM also includes retail investor contribution into the product through the Fund of Fund (FoF) category, which invests in these funds. Mutual funds' FoFs invest in other schemes or products.When mutual funds report ETF holdings by investor type, the FoF investments into ETFs are typically classified under 'corporate' AUM and not under retail or HNI. This is because the holder of the ETF units is the FoF scheme itself, which is managed by a mutual fund.'The AUM figures primarily reflect corporate investments because retail investors usually access gold through Fund of Funds (FoFs), which in turn invest in Gold ETFs,' said Niranjan Avasthi, senior vice president, Edelweiss AMC.Additionally, multi-asset funds, popular among investors, also allocate to gold ETFs. In cases where an AMC doesn't offer its own gold ETF, investments from its gold FoFs or multi-asset funds are routed into gold ETFs of other AMCs. These flows are classified as corporate AUM in the underlying gold ETFs, Avasthi said.AMCs that do not have their own gold ETF invest in such ETFs of other asset managers when money flows into their gold FoFs. As a result, this is recorded as corporate AUM in those gold ETFs, Avasthi said.The higher flows from individual investors through gold FoFs are partly on account of the more favourable taxation since July 2024. The government, in its budget announcement, said long-term capital gains tax on gold and equity-oriented FoFs would be at 12.5% if held over 24 months.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
31 minutes ago
- Time of India
South Korea faces dramatic population crash, could have just 7.5 million people by 2125
South Korea's Worst-Case Scenario: Just 7.5 Million People by 2125 Live Events Aging Population to Outnumber Working-Age Adults Younger Koreans Prioritize Stability Over Family Life FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel South Korea's population may shrink to only 15% of where it stands today by 2125 if the current trend of demographic decline continues, found a private research institute in Seoul, as per a Korean Peninsula Population Institute for Future estimated that under its worst-case scenario, the nation's population would decline from 51.68 million today to only 7.53 million by 2125, which is less than the number of people currently living just in the city of Seoul, as per The Korea Herald report. Even in the most optimistic scenario, the population would decline to less than a third of its present size, at just over 15 million, according to the report. While the median projection for the 2125 population is 11.15 million people, as per the research also found that the rapidly increasing pace of population fall in the median scenario would see the population drop 30% by 2075 and then by more than half over the following 50 years, according to The Korea READ: Vinod Khosla's dire warning: AI could wipe out 80% of jobs and crush Fortune 500 giants by 2030 The institute used a cohort component method to find the latest long-term forecast of Korea's demographic trends over the next century, as per the report. The method is an internationally recognised technique that estimates future populations by incorporating factors like birth rates, mortality rates and immigration patterns, reported The Korea to the report, the drop in population is because of falling birth rates and also due to a compounding effect; with fewer people in each successive generation, the pool of potential parents shrinks, further accelerating the research found that even the ageing crisis is expected to deepen, and in 75 years, the worst forecast is that for every 100 people of working age, defined as 15 to 64 years old, there will be 140 seniors aged 65 or older, as reported by The Korea present, 100 working-age individuals support about 30 senior citizens, which indicates that South Korea is on track to become an 'inverted pyramid' society, where the number of dependents will outnumber those who provide support, according to the READ: Diddy and the Mann Act: What the law says and why he's not guilty of trafficking The research also mentioned details of a social sentiment analysis based on some 60,000 posts from the workplace community app Blind, which focused on the thoughts of people in their 20s to 40s about marriage and childbirth, as per the findings of Blind show that younger generations now prioritise 'money' and 'housing' over 'love' when discussing marriage, reported The Korea Herald. Financial burdens were a key concern in the conversations regarding childbirth, as per the study concluded that decisions on marriage and parenting are increasingly influenced by economic conditions, rather than personal preference, according to The Korea READ: Diddy verdict in — you won't believe his net worth or how he's paying those massive legal bills Because fewer people are having children, and each smaller generation means even fewer parents in the between 7.5 million (worst-case) and 15.7 million (best-case), down from 51.7 million today, as per the Korea Herald report.
Time of India
31 minutes ago
- Time of India
Indian envoy to Paraguay discusses biz opportunities with UP minister
Lucknow: Indian ambassador to the Republic of Paraguay, Piyush Singh, met Uttar Pradesh's minister of industrial development, Nand Gopal Gupta 'Nandi', on Wednesday to explore avenues for bilateral cooperation. Tired of too many ads? go ad free now During the meeting, the minister briefed the ambassador on the state's rapid industrial progress and its emergence as a key investment destination. The ambassador informed the minister that business community in Paraguay was particularly interested in India's agri-tech platforms. He also conveyed Paraguay's strong condemnation of the recent terrorist attack in Pahalgam, and reaffirmed its support for India in the global fight against terrorism. The two also discussed potential collaboration in sectors such as trade, agriculture, healthcare, and information technology. Nandi extended an invitation to Paraguayan investors, entrepreneurs, and traders to participate in the five-day International Trade Show scheduled to be held in Noida in Sept 2025, highlighting the event as a platform to connect with the state's economic, social, cultural, and developmental achievements. Invest UP CEO Vijay Kiran Anand, MD of Pickup, Piyush Verma, joint export commissioner Pawan Agarwal, and other officials were also present.
Time of India
34 minutes ago
- Time of India
Rush-hour cab rides may now cost twice the base charge
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The ministry of road transport and highways has allowed cab aggregators to charge up to two times the base fare during peak hours, as against 1.5 times earlier, while for non-peak hours the fare could drop to a minimum of 50% of the base move is expected to benefit cab aggregators like Ola and Uber, among others. Besides, the ministry has advised states to adopt the revised guidelines within three months."The aggregator shall be permitted to charge a minimum of 50% lower than the base fare and a maximum dynamic pricing of two times the base fare specified under sub-clause (17.1)," the ministry said in its Motor Vehicles Aggregator Guidelines 2025 issued on the base fare chargeable shall be for a minimum of three kilometres to compensate for "dead mileage", including the distance travelled without a passenger and the distance travelled and fuel utilised for picking up the per the guidelines, the fare notified by the state government for the respective category or class of motor vehicles shall be the base fare chargeable to passengers availing services from the case of cancellations, a penalty of 10% of the fare not exceeding ₹100 shall be imposed on the driver, if the cancellation is made without a reason identified as valid by the aggregator.A similar penalty will be imposed on the passenger when such cancellation is made without a valid guidelines said the central government shall develop and designate a portal to enable for single-window clearance of application for licence as aggregator. "The licence fee payable by the aggregator shall be Rs 5 lakh and the licence shall be valid for a period of five years from the date of its issue," it said. Aggregators have been mandated to ensure that drivers have health and term insurance of at least ₹5 lakh and ₹10 lakh, it mandates appointment of grievance officers by the aggregators while restricting the use of vehicles older than eight years from the date of registration.
