HDFCsec-Learning Series-Gold ETFs
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Transcript of HDFCsec-Learning Series-Gold ETFs
Gold ETFs -A Smart Way to invest in GOLD
Why should you invest in Gold ?
An Excellent Diversification for your Portfolio
Hedge against Inflation, Event Risk Globally renowned Asset Class Intrinsic value
Performance of GOLD
Average return turned –ve only twice in last 15 years.
An Excellent Diversification for Portfolio.
Average retuns of Gold in last 15 yrs
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%19
98
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
% Returns
Investment options in Gold Physical Gold (Gold Coin, Bar)/ Jewelry
Commodity exchange
Gold ETFs
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.
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.
Comparison of Gold ETF vs Gold Bars vs Jewellery
Overall Gold ETFs outscore other Avenues on the above parameters
Transaction Charges Jewellery Gold Bars Gold ETF
Purchase Making charges of 15- 20%
10% to 20% mark up charges by banks.
Brokerage of 0.5% or even less
Sell 10% – 20% is lost due to Purity issues
Banks do not take it back , so premium
paid at time of purchase is written
off.
Brokerage of 0.5% or even less
Maintenance
Insurance charges and locker charges
(if you put it in locker)
Insurance charges and locker charges
(if you put it in locker)
1.00%
Tax Implications
Long term capital gain, but after 3
years. plus wealth tax
Long term capital gain, but after 3
years. plus wealth tax
Long term Capital tax of, but after 1
year. No wealth tax
You pay more overhead charges while investing in Gold Bars and Jewellery
NAV’s of Gold ETFs at par with Gold prices
Comparison of Kotak Gold ETF & Spot Gold price
0500100015002000250030003500
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mon
thly
Gol
d Pr
ice
Gold PricesKotak ETF
Multiple trading platforms to invest in Gold ETFs
Log on to trading a/c
Click on Buy / Sell Enter name of the Gold ETF, Units & Pricewww.hdfcsec.com
How to invest in Gold ETFs through us?
Log on to trading a/c
Click on Buy / Sell Enter name of the Gold ETF, Units & Price
Place Order
Or
Call our branch Authenticate yourself Place Order
You can invest in Gold ETFs just like any equity scrips.Note – Demat account is mandatory to invest in Gold ETFs.
Investment Style to be adopted :
• Investing in Gold with Lump sum amount.
• Investing in Systematic Investment Plan way
Power of SIP in Gold
If you Invest in 1 Unit of Kotak Gold ETF every month from March 2008, you would earn approx 19.78% return on your investment.
Power of SIP in Gold ETF
0200400600800
100012001400160018002000
Mar
-08
Jul-0
8
Nov
-08
Mar
-09
Jul-0
9
Nov
-09
Mar
-10
Jul-1
0
Nov
-10
Mar
-11
Jul-1
1
Nov
-11
Mar
-12
Jul-1
2
Nov
-12
Hun
dred
s
Cost of InvestmentValue of Investment
What is DIYSIP ?
DIYSIP stands for : Do It Yourself Systematic Investment Plan.
It is a product through which, you can invest in stocks, Gold ETFs & Index ETFs in a disciplined manner.
It helps you use market volatility to your advantage & build your own portfolio over a period of time.
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 AveragingTime in the market is better than timing the market
• Convenience and Light on pocketYou can start investing in one unit of Gold ETFs every month
How to start your DIYSIP online Logon to your trading account Visit
www.hdfcsec.com
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
For any further queries, visit our website www.hdfcsec.com or call our
customer care @39019400
Thank you