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Gold ETFs – Best Tool for Investment in Gold

SAURABH MAHESHWARI, INDEPENDENT RESEARCH ANALYST (SELF), NSE CERTIFIED MARKET PROFESSIONAL, www.nifty-analysis.blogspot.com

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Road Map for Presentation

Importance of Gold for Investment

Instruments Available for Gold

Conclusion

About Gold ETFs

Why Gold ETFs ?

Gold ETFs in India

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Importance of Gold for Investment

Price of Gold from 1990 to 2012

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Indian Gold Trend from 1990 to 2012

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Gold is a Golden Bull…..

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Instrument Available for Gold

Gold Coins Gold Jewellery Gold Biscuits Derivatives of Gold Gold ETFs

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Comparison of Instruments Available for Investment in Gold….Basis Gold

JewellersGold Coins/ Biscuits

Gold Futures

Gold ETFs

Purchase & Sale Mode

Physical Form

Physical Form

Future Contracts

Demat Form

Security of Assets

Investor’s Concern

Investor’s Concern

Taken Care by Exg.

Taken Care by Fund

Transparency

Very Low Very Low High Very High

Impurity Risk

High High Nil Nil

Pricing (For Retail Investors)

Neither Standard nor transparent

Neither Standard nor transparent

Transparent and traded on commodity exchanges

Transparent and traded on NSE

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Comparison of Instruments Available for Investment in Gold….

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Basis Gold Jewellery

Gold Coins/ Biscuits

Gold Futures

Gold ETFs

Liquidity Low Low Very High Very High

Denomination

Available in Standard Denomination

Available in Standard Denomination

Available in Kg, 100 Grams, 8 Grams & 1 Grams

Available in 1 Gram & ½ Gram

Impurity Risk

High High Nil Nil

Wealth Tax Yes Yes No No

Comparison of Instruments Available for Investment in Gold

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Basis Gold Jewellery

Gold Coins/ Biscuits

Gold Futures

Gold ETFs

Price Risk High High Very High Very Low

Long-Term capital gain Tax

Applicable after 3 Years

Applicable after 3 Years

Not Applicable

Applicable after 1 Years

About Gold ETFs

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What is Gold ETFs ?

Gold ETF (Gold Exchange Traded Funds) are Mutual Funds Listed on Stock Exchange. The investment objective of Gold ETFs is to provide returns that, before expenses, closely correspond to the returns provided by domestic physical gold price.

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Gold ETFs…………

Gold ETFs are units representing physical gold, which may be in paper or dematerialized form. Gold ETFs are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of Gold, and to buy and sell that participation through trading of security on a Stock Exchange.

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Gold ETFs………

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Why Gold ETFs ?

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Why Gold ETFs ?

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Who will guarantee the purity of Gold ETFs

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Gold ETFs can be used as collaterals

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ETFs can be converted to Physical Gold

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Tracking Error

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14 Gold ETFs in IndiaSymbol AMC Unit

GOLDBEES Goldman Sachs Gold Exchange Traded Scheme

1 Gram

GOLDSHARE UTI Gold Exchange Traded Fund

1 Gram

IDBIGOLD IDBI Gold Exchange Traded Fund

1 Gram

CRMFGETF Canara Rebeco – Gold ETF

1 Gram

AXISGOLD Axis Gold ETF 1 Gram

KOTAKGOLD Kotak Mutual Fund – Gold Exchange Traded Fund

1 Gram

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Gold ETFs in India…..

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Symbol AMC Unit

QGOLDHALF Quantum Gold Fund – Exchange Traded Fund

½ Gram

HDFCMFGETF HDFC Gold Exchange Traded Fund

1 Gram

MGOLD Motilal Oswal MOST Shares GOLD ETF

1 Gram

SBIGETS SBI Gold Exchange Traded Scheme

1 Gram

RELGOLD Reliance Shares Gold Exchange Traded Fund

1 Gram

RELIGAREGO Religare Gold Exchange Traded Fund

1 Gram

Gold ETFs in India………

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Symbol AMC Unit

BSLGOLDETF Birla Sun Life Gold ETF

1 Gram

IPGETF ICICI Prudential Gold ETF

1 Gram

Conclusion

Gold ETFs – Best Tool For Investment in Gold

Gold ETFs can be held in Demat Form There is no Impurity Risk There is full transparency in terms of

pricing There is very High Liquidity There is no Wealth Tax, VAT, STT etc.

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Conclusion......

It is Simple, Safe & Trusted Gold ETFs can be converted into

Physical Gold because every ETF unit is backed by Physical Gold.

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