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kulman
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   Topic: GOLD ETF: Sona kitna sona hain?
Posted: 17/Feb/2007 at 9:16pm |
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Gold Benchmark Exchange Traded Scheme (Gold BeES) is an open ended exchange traded fund (ETF) that seeks to provide returns that, before expenses, closely correspond to the returns provided by domestic price of gold through physical Gold
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NAV of each unit will track approximate price of 1 gram of Gold
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Minimum Investment during the NFO is Rs.10,000/- and in multiples of Rs. 1,000/-thereafter
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Demat Account required
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New Fund Offer Opens - Thursday, 15th February, 2007 Closes - Friday, 23rd February, 2007
This would be traded on NSE.
Is it worth it compared to say physically buying or leveraged trading on MCX/NCDEX?
Edited by kulman - 17/Feb/2007 at 9:17pm
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us121
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Posted: 17/Feb/2007 at 10:16am |
i am not very much bullish on this for several reasons:
1. gold is best tool for taking care of un accounted money. not possible through ETF
2. they have recurring cost of about 1 to 1.5% every year for your portfolio. this eats away good amount of money if looked at with the effect of compounding diminishing retrun from what you loose in that.
3. if one is really looking for gold as a tool of need e.g. marriages in family etc. than physicall form of purchase is much better
4. many more gold ETFs are entering the market. TATA has also filed the papers. may be worth waiting for some time before jumping in the same.
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ABILITY will get u at d top. CHARACTER will retain u at d top
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kulman
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Posted: 17/Feb/2007 at 11:06am |
Thanks us121.....I tend to agree with your views.
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BubbleVision
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Posted: 17/Feb/2007 at 11:28am |
Kulman - Leveraged Trading on MCX and NCDEX is far more easier ...with lots of liquidity! 
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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kulman
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Posted: 19/Feb/2007 at 3:52pm |
.....MCX and NCDEX is far more easier ...with lots of liquidity!
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BubbleVision....u mean the state of affairs in punter's trousers?
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BubbleVision
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Posted: 19/Feb/2007 at 3:56pm |
You understand very very well!
Liquid and Liquidity!
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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kulman
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Posted: 19/Feb/2007 at 4:05pm |
Gold as an investment avenue has in some sense failed to deliver over the long-term. In fact, over the last 17 years, gold has appreciated by only 8.6% CAGR - Compounded Annualised Growth Rate. This compares not so well with other investment avenues like the stock markets (the return from the BSE Sensex over the same period is about two times more than what gold has delivered).
Being an ETF, the performance of Gold BeES will be closely linked to that of the domestic gold price. As we have commented earlier, over the long-term (17 years) gold has not been a great performer as a standalone investment avenue compared to other asset classes like equities, debt and real estate. However, from a diversification perspective it has high utility in a portfolio.
Given the relatively high entry load charged by the fund house during the NFO period, investors, who intend investing in gold, should avoid Gold BeES during the NFO period. They can consider investing in the ETF after the NFO period when it gets listed in the stock exchange. As mentioned earlier, brokerage paid to a stock broker is a lot lower than the entry load charged by the fund house during the NFO.
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BubbleVision
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Posted: 19/Feb/2007 at 4:38pm |
That 17 years takes into account the biggest Secular Bear Market in Commodities (and Gold)... in the last 50 years. That however is NOT the Case now.
Most of the Technecians are bearish on Commodities because the CRB has broken below its overall trendline which was in place since 2001. However ... the Composition of CRB changed in 2005, where the weightage of crude (and energy) went up from 10% to 40%...
If this change in CRB had NOT taken place then even after the selloff in Copper and Crude ... the CRB would have been in an uptrend...
So the Index which broke below the important Technical Support trendline... was a different one..and Commodities (as defined by the Unrevised index and the correct Index in my view) is still in an UPTREND.
The INDEX which was with even weightage (till 2005) still trades in NYBOT as CCI ...
I am NOT bearish on Commodities ... But i may be bearish from time to time on specific commodities... Dont take my view on Copper to be a call on Base Metals Complex..
Look at the performance of Gold over a Secular bull market (1966-1981) and a Secular bear market (1981 - 2001).
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