SBI (SBIN.NS : 1147.05 +69.6) Mutual Fund, a joint venture between the State Bank of India and Societe General AMC, on Monday launched an open-ended Gold Exchange Trading Scheme (SBI GETS). The minimum investment in SBI GETS is Rs 5,000 and in multiples of Re 1 thereafter.
"Once the new fund offer (NFO) closes on April 28, 2009 the units would be listed on the National Stock exchange (^NSEI : 3211.05 +150.7). Investors can then trade in it like any other stock in the secondary market," said Navneet Munot, chief investment officer of SBI Funds Management Private Ltd.
Each unit of SBI GETS will be approximately equal to the closing price of 1 gram of gold on the date of allotment. The units will have face value of Rs 100, and will be issued at a premium equalling the difference between allotment price and face value during the NFO.
Achal Kumar Gupta, managing director and CEO of SBI Funds Management Private Ltd said, "Gold is the safest bet during troubled times. Indians consume around 800 tonnes of gold annually, but 95 per cent of it is in physical form."
Advocating benefits of gold in demat form, Munot said, "In exchange traded scheme, the holding will be in demat form and investor does not have to worry about its safekeeping and purity. The unit can be sold at prevailing market price at any given day."
The fund is looking at raising around Rs 150-200 crore. "At compound annual growth rate of 20 per cent, gold is a must in every portfolio," said Munot.
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