HDFCsec-Learning Series-Gold ETFs


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Invest in gold the smart way by opting for Gold ETFs

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HDFCsec-Learning Series-Gold ETFs

  1. 1. Gold ETFs -A Smart Way to invest in GOLD
  2. 2. Why should you invest in Gold ? An Excellent Diversification for your Portfolio Hedge against Inflation, Event Risk Globally renowned Asset Class Intrinsic value
  3. 3. Performance of GOLD Average retuns of Gold in last 15 yrs 35.0% 30.0% An 25.0% Excellent 20.0% Diversifica 15.0% tion for 10.0% Portfolio. 5.0% 0.0% 2001 2007 1998 1999 2000 2002 2003 2004 2005 2006 2008 2009 2010 2011 2012 -5.0% % ReturnsAverage return turned –ve only twice in last 15years.
  4. 4. Investment options in Gold Physical Gold (Gold Coin, Bar)/ Jewelry Commodity exchangeGold ETFs
  5. 5. What is Gold ETF? Gold ETFs are exchange traded funds,which facilitates investor to participate in the gold market without the necessity of taking physical delivery of gold. In simple words, the investment in Gold ETF is in demat form. Gold ETFs are designed to provide returns in line with returns provided by physical Gold. The NAV of one unit closely corresponds to the spot price of 1 gram of gold after accounting for expenses. Each unit is approximately equal to the price of 1 gram of Gold.
  6. 6. Advantages of Gold ETF Potentially cheaper investment option compared to other forms of gold investment. Quick and Convenient dealing through Demat Account. No Storage Costs & Security Issues for investors. Transparent Pricing. Tax efficient-Mutual Fund Taxation, No Wealth-Tax. Listed and traded just like a stock. Flexibility to buy in small lots (minimum one unit=1 gram of gold*).*In case of some Gold ETFs one unit equals half gram of gold.
  7. 7. Comparison of Gold ETF vs Gold Bars vs JewelleryTransaction Jewellery Gold Bars Gold ETFCharges Making charges of 10% to 20% mark up Brokerage of 0.5% orPurchase 15-20% charges by banks. even less Banks do not take it You pay back , so premium more 10% – 20% is lost paid at time of Brokerage of 0.5% orSell due to Purity issues purchase is written even less overhead off. charges while Insurance charges Insurance charges and locker charges and locker charges investingMaintenance (if you put it in (if you put it in 1.00% in Gold locker) locker) Bars and Long term capital Long term capital Jewellery Long term Capital gain, but after 3 gain, but after 3 tax of, but after 1Tax Implications years. plus wealth years. plus wealth year. No wealth tax tax taxOverall Gold ETFs outscore other Avenues on theabove parameters
  8. 8. NAV’s of Gold ETFs at par with Gold prices Comparison of Kotak Gold ETF & Spot Gold priceMonthly Gold Price 3500 3000 2500 2000 Gold Prices 1500 Kotak ETF 1000 500 0 Sep-08 Sep-09 Sep-10 Sep-12 Sep-11 Mar-09 Mar-12 Mar-08 Mar-10 Mar-11
  9. 9. Multiple trading platforms to invest in Gold ETFs Click on Buy / Enter name of theLog on to Sell Gold ETF, Units &trading Pricea/c
  10. 10. How to invest in Gold ETFs through us? Click on Buy / Enter name of theLog on to Sell Gold ETF, Units & Place Ordertrading Pricea/c Or Authenticate Call our branch Place Order yourself You can invest in Gold ETFs just like any equity scrips. Demat account is mandatory to invest in Gold Note – ETFs.
  11. 11. Investment Style to be adopted :• Investing in Gold with Lump sum amount.• Investing in Systematic Investment Plan way
  12. 12. Power of SIP in Gold Power of SIP in Gold ETF Cost of Investment Value of Investment Hundreds 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12If you Invest in 1 Unit of Kotak Gold ETF every monthfrom March 2008, you would earn approx 19.78%return on your investment.
  13. 13. What is DIYSIP ?DIYSIP stands for : Do It Yourself SystematicInvestment Plan.It is a product through which, you can invest instocks, Gold ETFs & Index ETFs in a disciplinedmanner.It helps you use market volatility to your advantage &build your own portfolio over a period of time.
  14. 14. Benefits of Investing in DIYSIP way…• Power of Compounding Effect It refers to process of earning returns on reinvestment of assets, which have already generated returns. This means the asset will be generating returns on an asset’s reinvested earnings.• Rupee cost Averaging Time in the market is better than timing the market• Convenience and Light on pocket You can start investing in one unit of Gold ETFs every month
  15. 15. How to start your DIYSIP online  Logon to your trading account Visit  Click on DIYSIP  Select Online registration  Enter the Name of the Gold ETF  Enter the No. of units  Authenticate using your Login id & Password  Confirm
  16. 16. Thank youFor any further queries, visit ourwebsite or call our customer care @39019400