A quick review of the Kotak Gold ETF

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Kotak Gold Exchange Traded Fund is an Open-Ended Gold Exchange Traded Fund, which would invest in gold and endeavour to track the spot price of gold without taking physical delivery of gold. Each unit of Kotak Gold ETF will approximately be equal to 1 gram of gold at the time of allotment.

A quick review of the Kotak Gold ETF

Investment Objective: 

The main investment objective of the scheme is to generate returns that are in line with the returns on investment in physical gold, subject to tracking error.

KGEFT is backed by physical gold held by the Custodian (Scotia Macotta). All physical gold metal held with Scotia Macotta conforms to the London Bullion Market Association's (LBMA) rules for Good Delivery.

About the scheme:

Kotak gold ETF invests in physical gold and endeavors to track the domestic spot price of gold as closely as possible. Thus it provides an option to invest in gold without taking physical delivery of gold. Each unit of KGEFT is approximately equal to 1 gram of gold.

The Fund would invest in gold, and endeavor to track the spot price of gold. The Fund would invest all the residual funds after investing in gold, in debt and money market instruments.

Basic Details:

Listed: BSE, NSE
Minimum application: Rs 5000
Manager: Mr. Abhishek Bisen.
ISIN: INF373I01015

Redemption method:

In case a Unitholder wants to redeem, (large investor or authorized participant) he may submit to any of the offices of AMC Redemption request Form with acopy of redemption request duly acknowledged by the depository participant. The depository participant will process the request and forward the same to Registrar to the Scheme in the normal course. The time taken for confirmation of repurchase of units is dependent upon the timelines and procedures of depositories. Redemption proceeds will be sent to the unitholder within 10 business days from the date of confirmation with the depository records.

Advantages of Kotak gold ETF:

As an asset class, it gives you the benefits of diversification in your portfolio.

Since it trades like a share, buying and selling happens quickly and therefore it is highly liquid.

With Kotak Gold ETF you don't have to worry about the risk of theft and quality of gold.

All transactions happen in electronic mode, so there is no risk in case of unforeseen circumstances.

Lower Cost:
The expenses incurred in buying and selling Kotak Gold ETF are much lower then the cost incurred in buying, selling, storing and insuring physical gold.


Read more about: mutual funds, kotak, gold, etf
Story first published: Wednesday, November 14, 2012, 12:39 [IST]
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