Gold ETF soars sky high .. crosses 11000 Cr..

Are you one of those who frequent T.Nagar area to the innumerable Gold Jewellers – GRT, Saravana, and more…..

Date	Gold		Silver 1 Grm
	24K 1 GM	22K 1 GM
10-Oct-12	3143.50	2939.00	66.40
9-Oct-12	3134.00	2930.00	66.20
8-Oct-12	3111.00	2909.00	65.60
7-Oct-12	3108.00	2906.00	66.20
6-Oct-12	3108.00	2906.00	66.20

Here is something which will help you on your way back home, via T.Nagar.  May be like the many others, you would enter the nearby ATM before entering the shop and not buy with your credit card, trying to avoid the VAT, which is infact only 1% for Gold. Better insist on the bill and pay the tax too….

Many would have entered into the various Chit schemes of Jewellers – which are packaged attractively.  Some actually converts the amount of monthly installment to ‘gram of gold’ based on the prevalent rates of the day and offer that such schemes are devoid of ‘making charges and depreciation’ and that the Company would bear the VAT too……..  already a member or going to join one today !! Are you aware that such schemes allow your purchase of jewellery only and not to gold in bar / biscuit…

Away from all this melee, there is another group, which seems steadily increasing – those who invest through Gold ETFs.  Firstpost today reports  that Investor assets in gold ETFs  has hit record high of Rs 11,000 cr

According to that report, rising gold prices and continuing investment flow in yellow metal has pushed the size of assets held through gold exchange traded funds to an all-time high of Rs 11,198 crore. The surge in asset size of gold funds has come at a time when the government is contemplating steps to encourage large flow of household savings into equity, mutual funds and other financial instruments, rather than to idle assets like gold.

According to data compiled by mutual fund industry body AMFI, the assets under management of gold ETFs crossed the Rs 11,000 crore mark in September from Rs 10,701 crore in August. In June, investor wealth in gold ETFs surpassed the psychological mark of Rs 10,000 crore; it was just above Rs 5,000 crore level till a few months ago in May 2011.

There are as many as 25 different gold ETF schemes across 14 different fund houses at present. These products, which track the metal’s prices, provide an opportunity to investors to accumulate gold over a given period of time since they can be purchased in small quantities.

In the last 3 months, inflows worth Rs 500 crore have come into gold ETFs. In 2011-12, over Rs 3,600 crore was pumped while inflows of Rs 2,250 crore came in 2010-11. Industry experts said benefits such as no risk of theft and zero storage cost compared to physical gold, have sustained this interest among investors since the first gold ETF was launched in February, 2007.  Gold prices have also more than tripled from Rs 10,000 levels to Rs 31,000 in the last five years. These factors have contributed to the rush for gold ETFs and the category have seen assets under management soar from Rs 138 crore in April, 2007 to Rs 11,198 crore in September, 2012— over 80 times in 5 years.

India is the largest consumer of gold with an annual demand of about 700 tonnes. Experts say that unlike gold coins and bars, for which most jewellers offer only an exchange, gold ETFs are sold at transparent prices across the country. No sales tax, VAT, wealth tax or securities transaction tax act as sweeteners, they added.

So, where are you heading for – here is an extract of NAV over a period of time in respect of one of the leading Gold ETF – Axis Gold

Axis Gold ETF
Date	NAV
8-Oct-12	3012.36
5-Oct-12	3013.50
28-Sep-12	3061.59
6-Sep-12	3116.13
23-Aug-12	2994.75
6-Aug-12	2914.41
10-Jul-12	2905.70
27-Jun-12	2935.55
26-Jun-12	2956.61
31-May-12	2895.71
27-Apr-12	2856.75
26-Apr-12	2841.49
30-Mar-12	2784.10
29-Mar-12	2775.27

With regards – S. Sampathkumar

10^th Oct 2012

Article source : www.firstpost.com