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Gold ETFs eye futures for that extra edge

In May 2019, market regulator SEBI came out with a circular allowing mutual funds (MFs) to participate in commodity derivatives. While letting all MFs that run hybrid and multi-asset schemes to invest in exchange- traded commodities of all but sensitive commodities, it made provision for MFs running gold ETFs to use exchange-traded commodity derivatives having gold as underlying. Thus, many MFs, including big names in gold ETFs, are in the process of selling some gold in their vault and replacing it with gold futures contract.

To understand the risks and returns for investors in gold ETFs, we spoke to experts ...

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