Quantum Asset Management Company on Wednesday advised investors to have about 10 percent allocation to gold from a portfolio perspective.

In an interview to CNBC-TV18, Chirag Mehta, senior fund manager-alternative investments, said. "Gold exchange-traded funds (ETF) have not done well for the last couple of years and the primary reason for that is investors were attracted to the equity markets. Equities were doing significantly better and people were moving from gold. Like assets to equities or even from fixed income or fixed deposit to equities. Now, with equities market correcting, there is some risk that is being observed in that market and people are now looking at other avenues and I am sure that will include gold.”

According to Mehta, "People will surely move towards gold and this festive season, there will be a good amount of purchases as compared to what we saw last couple of years."

"Government has been pushing for thelast 3-4 years for the sovereign gold bonds and it has met with little success. If you see the total collections, it's not more than about Rs 5,000 crore or around that number. Gold ETFs at one point of time were about Rs 12,000 crore in size, despite the redemptions we have seen is equivalent to sovereign gold bond size approximately. So, people have not given up on gold ETFs, it's just gold was not attractive for people and we saw those redemptions coming in. People will buy into gold ETF as that is very close to the physical gold form that people can buy," he added.

"Sovereign gold bonds has some limitations. If someone wants to exit out of gold, it's very difficult. Liquidity is not there on the exchanges or are limited on the exchanges. Holding period is minimum five years. So, from portfolio perspective, if someone wants to rebalance the portfolio and adjust their gold weight, it's very difficult to do in sovereign gold bond, whereas it's very easy in gold ETFs. So, gold ETFs are very liquid that is the plus point," Mehta said.