Digital gold stumbles, ETFs sniff opportunity

Fund houses are promoting gold ETFs as secure, regulated, transparent

- Apoorva Ajith

With Sebi drawing clear boundaries between regulated and unregulated gold products, mutual funds see an opportunity to draw investors into their ETFs.

(REUTERS)

Mutual fund (MF) houses are stepping up efforts to position gold exchange-traded funds (ETFs) as a safer, fully regulated alternative to digital gold after a recent regulatory warning prompted fresh scrutiny of the fast-growing digital gold market.

Over the past week, several large fund houses have rolled out prominent print and digital campaigns branding gold ETFs as “secure,” “regulated,” and “transparent,” seeking to tap investor concern and long standing confusion around different gold-linked investment products.

The promotional burst follows a Securities and Exchange Board of India (Sebi) circular issued earlier this month that explicitly warned investors about the risks of digital gold, an investment avenue that has grown rapidly through smartphones and UPI-led platforms but sits outside the securities regulatory framework.