Wednesday, February 3, 2010

Religare Gold Exchange Traded Fund

Religare Mutual Fund has announced the launch of its new fund Religare Gold Exchange Traded Fund, an open ended Gold Exchange Traded Fund. The Scheme seeks to generate returns that closely correspond to the returns provided by investment in physical gold in the domestic market, subject to tracking error.

The fund will be managed passively with investments in physical gold and will endeavor to track the performance and yield of its underlying asset viz. gold. Investments in physical gold will be made regardless of any investment merit. The fund intends to follow a fully invested approach and will have a minimum exposure of 90% of its assets in gold and gold bullion at all times. One unit of Religare Gold ETF will represent 1 gram of gold. The fund may buy and sell gold at different points of time during the trading session which may or may not correspond to the closing price of gold, maintain cash to meet its liquidity requirement, which may result in the Scheme having tracking error and to that extent the performance of the Scheme may not commensurate with the performance of its underlying asset. However, the fund manager will try and minimize the tracking error to the fullest extent possible. The fund is benchmarked to the Price of Gold.

The new fund offer (NFO) opens for subscription from January 28, 2010 to February 23, 2010. The New Fund Offer (NFO) price for the scheme is Rs 100 per unit plus premium.

Investors can buy units of Religare Gold ETF directly from the Fund House during the New Fund Offer Period. Post the New Fund Offer Period; Units of Religare Gold ETF will be listed on National Stock Exchange / Bombay Stock Exchange. Investors can buy and sell units of Religare Gold ETF on the exchange through any registered broker.

The minimum application amount during NFO for retail investors is Rs.5,000/- and in multiples in of Re.1/- thereafter while for Authorized Participants and Large Investors the minimum application amount is Rs.15 lacs and in multiples of Re.1/- thereafter or 1 KG gold per application and in multiples thereafter. Units will have face value of Rs.100 each and will be issued at a premium equivalent to difference between allotment price and face value during the NFO.

The entry / exit load is nil for the scheme. The fund managers of the scheme will be Gautam Kaul.

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