Who looks at fundamentals?

Better Markets Digest #12. In this edition, we look at:

- Outflows in Gold ETFs

- India in a good spot

- Memes are back

Hedge

Gold is a weird instrument. Often, you can’t tell why its prices go up or down or what makes it volatile. That’s a debate for another time.?

For now, Gold ETFs saw an outflow of nearly ?396 crore in April, marking the first withdrawal since March 2023. It’s not surprising either, considering Gold has been at an all-time high in the past few weeks.?

I asked Chatgpt to explain what net outflow means:

Net outflow occurs when the total amount of money withdrawn by investors exceeds the total amount of money invested. For example, if a mutual fund has more investors redeeming their shares than new investors purchasing shares, the fund experiences a net outflow.

However, despite the decline in outflows, the Assets Under Management (AUM) is up by 5% compared to the previous month. Thanks to increasing gold prices.

BTW, you can tell we are obsessed with gold, we wrote about it here and here.

Foreign money

Loosely speaking, Nifty is a good way to look at how the Indian markets are performing. The same applies to the S&P 500 for US markets. There are several indices for each use. One such index is looking at emerging markets like ours, China, and several other countries—the MSCI Emerging Markets Index (MSCI EM).?

Foreign investors look at this index because a growing economy means rapid growth, and who wouldn’t want to benefit from that by investing large sums of money??

As you can guess, this index is pretty important because the flow of foreign capital in a particular emerging market is decided based on it. And, India is set to get $2.5 billion from Foreign Institutional Investors (FIIs) because India’s weightage in the index rose.

Till 2020, India’s weightage in this index stood at 8% and it will now touch 19%. Meanwhile, China’s weightage has dropped from a high of ~40% in 2020 to now 25%.

The difference between India and China's weight in the index is shrinking.

Comeback

The past few days on a global level have been something of a kind.?

You know about the Gamestop (GME) saga, right? To quickly summarise, hedge funds were shorting GME, and I guess people on Reddit weren’t happy about it. Keith Gill (Roaring Kitty) was a key part of getting Gamestop (GME) from around $17 to nearly $500 per share back in 2021.?

Now, Gill is back from a long sabbatical, I guess. He posted a picture of a guy leaning forward in a chair, and people went crazy. GME moved up 75%.?

I forgot to mention one more thing. A similar thing, like GME, happened with AMC as well. And its stock went up 78%.

Yeah, it’s pretty crazy.?