Final Gold Etf

8/9/2019 Final Gold Etf

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Presented by:

Foram Thakkar

Khushbu Sheth

Palak Thakkar

Soumya Kumar Mondal


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May 2002: Benchmark AMC Filed Offer Document for the firstETF in the world with SEBI

Nov 2006: SEBI amended Custodian of Securities Act

Feb 2007: Gold ETF GOLD BeES introduced in India byBenchmark AMC

Mar 2007: Benchmark Gold ETF Gold BeES listed on NSE.

UTI launched its gold fund UTI GOLD SHARE.

Apr 2007: UTI GOLD SHARE get listed on NSE

July 2007: Kotak gold etf

Jan 2008: Quantum gold etfs

Oct 2008: Reliance gold etf

March 2009: SBI gold etf

Jan 2010: Religare gold etf


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Defi iti

Openended mutual fund scheme Invest m ney c llected fr m invest rs in

standard g ld bulli n(0.995 purity).

Purp se

Track and reflect the price f the g ld. An pp rtunity t gainexp sure t the performanceof

gold

Strategies

Hedge against the inflation & downward dollarmovement and Hedge against stock market

Short term protection Amount ofexposure and management expense ratio

Investors can purchase 1 unit also

InvestorsRequirement

Demat account


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Parameter Gold ETFs Physical Gold

Holding Dematerialized Form Coin, bar etc.

Transparency Very High Very Low

Pricing Will be traded atNSE/BSE, so,

transparent

Not Transparent

Sale Can be done on the

exchange itself

Based on set of

conditions

Wealth Tax No Yes

Short Term Capital

Gain Tax

If sold before 1 year If sold before 3 years

Impurity Risk Nil High


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(Purchases attractingentry load of

4.00%)Unitholders Investment (Rs.) 100

Purchase Price at which Units are

allotted (Rs.)

10.4000

No of Units allotted 9.6154

Amount available to Scheme forinvestment (Rs.)

9.6154*10 = 96.1538

Load Amount utilized for paymentof Broker/Agentscommission (Rs.)

9.6154*10*4.00% =3.8462

Initial Issue expense charged toinvestor

3.8462

Initial issue expense to be borne bythe AMC

Any amount incurredabove Rs.

3.8462


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Initial Issue Expenses Estimated %age ofAmount

Collected

Marketing and Advertising 0.40

Printing and Mailing 0.50

Broker/Agents Commission 3.00

Registrar Expenses 0.05

Bank charges and Other Expenses 0.05

Total 4.00


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Calculation of Redeemed Unitsexplained:

If Exit Load of 1.00% ischargeable

Unit Balance before Redemption A 2305.235

NAV on date of redemption B Rs. 11.0000

Exit Load Chargeable @ 1.00 % C Rs. 0.110 (11 x 1.00%)

Redemption Price D = B C Rs. 10.9890 (11 0.110)

If Redemption request is in Rs E Rs. 3500

No. of Units redeemed F = E /D 318.500 (3500/10.9890)

No of Units left = A F 198 . 35 (2305.235 318.500)

If Redemption request is in Units I 350 Units

Redemption amount will be J = I * D Rs. 384 .150 (350 x 10.9890)

No of Units left K = A I 1955.235 (2305.235 350)


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Return from physical gold

Price of gold

On 16th April,2009=Rs1432.1

On 16th April,2010=Rs1680

absolute return=17.31%


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2006-07 Lack of awareness

Prefer ion physical form

Need of Demat account

Lack of enthusiasms ofdistributors

Brokers are not interestedin chasing clients


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Worldwide there are approximately 2132 ETFs and exchangetraded products (ETPs) available, with more than $700billion in total assets under management

Study of ETFs reveals that they are one of the best optionavailable for the investor to invest in a particular sectorand get high return from that sector when that sector is inboom stage ,since the ETFs do not have any lock in periodit is beneficial for the investor ,he can very easily buy/sell

the ETFs in secondary market and book huge profit or loss


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Documents

Final Gold Etf