Birla Sun Life Asset Management Company (BSLAMC) has launched an open-ended gold exchange traded fund, Gold ETF that is scheduled to close on 9 May.
The ETF to list on BSE and NSE has a 15-day window with a minimum application amount pegged at Rs6000 and multiples of Rs2000 thereafter.
Investors have been offered the option to convert to physical gold provided by certain vendors.
In a bid to cash in on the spurt in gold prices led by the commodities rally, a number of Indian companies and mutual funds have been working on plans to launch new Gold ETFs. HDFC, a leading Indian private sector bank launched a Gold ETF scheme last year.
According to the company, the money raised would be invested in gold of 99.5 per cent purity sourced from refineries approved by the London Bullion Market Association.
After witnessing the strongest growth of 66 per cent in demand for the yellow metal in 2010 at 963.1 T on heavy demand for jewellery, India is now seeing a boom in investment demand in the yellow metal and silver.
India's first gold savings fund, Reliance Gold fund opened for subscription on 14 February and closed on 28 February. In the process it generated a record of Rs4000 crore for a new fund offer (NFO). Reliance received applications in excess of 2 lakhs.
Meanwhile, Kotak Mahindra Asset Management Company, also recently launched its 'Kotak Gold Fund'. The unique open ended fund allows investors to take exposure to gold without holding demat account.
India has 10 funds selling gold-backed securities, with combined assets of Rs44 billion, as on 31 March, according to data from the Association of Mutual Funds in India.
Source: http://www.domain-b.com/finance/insurance/birla_sun_life_insurance/20110425_gold_etf_2.html
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