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Monday, August 29, 2011

Want to invest in Gold and don’t have Demat account?

SBI Gold Fund
SBI Gold Fund is a FOF (Fund of Fund) that predominantly invests in SBIGETS (SBI Gold ETF) and returns by this Gold Fund shall closely correspond to the SBIGETS (SBI Gold Exchange Traded Scheme).
Investment in Gold, have given decent gains in past years. Scores of big financial institutions and central banks skeptical about the fiat system and ailing global economy are shifting their funds in gold.
To avail this opportunity retail investor too want to take the exposure in gold, as physical gold  comes with hassles of  safety, storing expenses and wealth tax, it is always advisable to invest in non-physical gold.
Now most suitable option of investing in non-physical Gold is Gold ETF’s but investors not having Demat accounts are unable to avail this option.
And that’s why such funds are ideal for those who want to invest in gold as an asset class but don’t have Demat account. Generally people who don’t trade shares are reluctant to open Demat account just for investing in the gold, and for such people Gold mutual funds is very viable choice. Besides this, investor can avail SIP facility to invest in SBI Gold Fund.
Issue Details:
·         Issue period: 22/08/2011-05/09/2011
·         Minimum investment : Rs. 5000 and then in multiple of Rs. 1
Salient Features of SBI Gold Fund
·         No need of Demat account
·         No applicable  wealth tax
·         No storage cost
·         Freedom from the fear of theft and larceny
·         Automatic SIP facility
·         Benchmark: domestic price of the gold
Redemption: Like other MF schemes this fund can be liquidated at prevailing NAV on any business day
Gold MF vs. other Gold Options
Inference: As expense ratio of such schemes are little more than  Gold ETF’s, only those investors who want to invest in gold but don’t have Demat accounts should invest in this fund. Those who have Demat accounts better directly invest in Gold ETF’s as expense ratio in  gold funds are higher than gold ETF’s.Though ETF’s don’t give the option of SIP but savvy investor can implement his own SIP by disciplined and periodic investment in gold ETFs.

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