UTI MF Hopes Gradual Fold Fund Demand

Mumbai: Gold-traded mutual funds, though slow in taking-off, are hoped to pick up in the next two-three years as the yellow metal has proved to be the only safe investment, offering a nine per cent return consistently in the long-term. Globally, the response to gold traded funds has been lukewarm in the initial two years but then it perks up considerably, sometimes exponentially. Contrary to belief, 35 per cent of gold in India is not for jewellery but procured for investment. Even in the US where gold traded funds were unveiled in March 2003, it took nearly two years for it to pick up after remaining static in 2004 before picking up in 2005. The growth became rapid from 2005 onwards and now nearly 600 tonnes of gold worth nearly $13-billion are with gold traded mutual funds globally of which the US market comprises of 450 tonnes ($9.5-billion).