Tuesday, October 18, 2011

IDBI Gold Exchange Traded Fund (ETF)

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IDBI Mutual Fund is launching an open ended gold exchange traded scheme or gold exchange traded fund (ETF). IDBI Gold Exchange Fund shall invest 95% to 100% in gold and 0% to 5% in money market and debt funds. The primary objective of this fund is to get capital appreciation by investing primarily in physical gold in India and should trace the domestic price of the gold in India.

The IDBI Gold ETF new fund offer (NFO) opens from 19 October and closes on 17 November, 2011. The ETF is available for trading after 17 November but one requires a DMAT account for transacting on this. The price of the unit during NFO is Rs 100 per unit. The minimum investment amount is Rs 10,000 and in multiples of Rs 1 thereafter.

There is no entry or exit load applicable for this gold ETF fund. There is also an option of getting loan against ETF from select gold financing companies.

Gold ETF is a good investment strategy apart from eGold and one can refer the advantages in my previous post.

Lot of the banks are entering this sector as Gold ETF volumes are shooting through the roof. SBI, HDFC, ICICI and Kotak already offer Gold ETF and some even offer Gold fund which is a fund of fund - based on Gold ETF instead of gold.

Checkout this link for Best Gold ETF in India!
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