Shamik On Gold & Etf Presentation

World & India Gold Trends & Microsec ETF imaginative Funds

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World Gold Trends &

Gold as an Asset class, Usage , ,Production

Silver production ,trends, use and funds

Gold ETF – Worldwide

India & Love for Gold

ETF Comes to India + Gold Physical & Jewellery

Imagine Fund options


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Data has been re-confirmed whenever possible & Information has been taken from the following sources..

AMFI


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On 1st august 2012


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Managed Money in Developed Markets has 1-1.5% in gold & Silver


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Gold:10 Year Price Movement in a log Chart


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Gold: Step up Price Movement & Corrections


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Gold vs USDX : Assets & diversification


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Correlation to global assets, gold v US dollar


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Risk off Risk on : Depletion of safe-havens


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When yields collapse in sovereign bonds, investors turn to Gold


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Gold Demand Trends & macroeconomic themes

Reassessing “risk-free” assets: Even assets traditionally considered safe are under pressure. German Bunds interest rates climbed in June. The Swiss franc, yen and US Treasuries are also facing issues – challenging their role as assets of last resort. Despite pressures on the price of gold, its lack of credit risk, its liquidity and hedging characteristics has made gold an attractive vehicle for long-term wealth preservation.

Correlation between gold and risk assets approaches long-term averages: Gold’s correlation to equities and other risk assets fell towards long-run average levels in Q2 helping portfolio diversification. Gold’s increased correlation to equities in Q1 was an indirect effect related to a weaker global economy coupled with a stronger US dollar.

Deflationary concerns in some countries provide room for further fiscal and monetary stimulus. This may lead to a further debasement of currencies through unconventional monetary policy and an increased risk of future inflation. These factors should provide support for future gold investment.


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issue of Gold Demand Trends

• The flight to the US dollar as a safe-haven in the first half of 2012 could be reversed. The US debt ceiling debate in Q3 and federal elections in November, followed by the necessity to confront a US$1.3tn budget deficit will prove challenging to the US dollar.

• With most currencies under pressure in one form or another, gold is likely to provide a hedging mechanism for investors. Gold prices declined in most currencies during the second quarter with the exception of the euro, Swiss franc and Indian rupee, in part due to a strong US dollar. Volatility remained elevated amidst a busy event-risk period. However, gold generally outperformed risk assets.


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1. Reflation Prospect of further monetary easing in Euro and US As fiat currency continues to be deliberately debased look for this price relationship to invert.

2. Third quarter is a seasonally strong quarter for Indian demand.

3. Exceptionally strong demand from China will support strong gold prices.Increase in Chinese Gold Reserves ...

4. Repatriation of Gold.....Hong Kong recently pulled all its gold holdings and deposits from London, wants to physically possess and control its gold Look for other countries to follow.

5. Lack of Gold Supply, fresh mining production in deficit ; Scrap gold supply has slowed down.

6. Scarcity of Gold, Throughout history only 160,000 tons of gold has ever been mined. For folks who might not know, all the gold that’s ever been found would fit into two Olympic-size swimming pools! At that equates to $9 trillion dollars vs $60 trillion in outstanding fiat currency, 300 Trillion $ of Debt (sovereign, Corporate Household )

Cont…..

11 reasons why gold prices can rise


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7. Central Banks Becoming Net Buyers of Gold Increasing gold holding by central banks. Despite the recent buying gold holdings as a percentage of central banks reserves are at historical lows.

7. Major Insurance Companies, University endowment funds are Now Buying Gold due to Structural changes of the world reserve currency structure.

8. Sovereign Wealth Funds and well known Fund Managers Buying Gold.......The sovereign wealth funds of China, Qatar, and Saudi Arabia have begun heavily investing in commodities world-wide to diversify out of fiat currency (dollar, euro). Look for more SWFs to follow.

10. Gold Hedging Concluding.....Traditional gold hedgers (producers, miners etc) such as Barrick, the world’s gold company, are eliminating their hedge books…essentially taking the cap of the market as gold supplies dry up producers are no longer locking in prices by selling massive quantities of futures takes selling pressure off and indicates producers believe prices will be going much higher.

11. Continued pressures on the peripheral euro zone countries and banking systems are likely to see physical bar investment. Persisting negative real interest rates will result in investors diverting some of their saving to gold


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Worldwide Production


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52 percent gets used for jewelry, 18 percent constitute official holdings (as in central banks of nations), 16 percent take the form of investments, 12 percent find industrial uses, leaving 2 percent unaccounted for.

How does the gold that’s mined get used


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Worldwide Gold & Silver ETF holdings >>


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Gold, ETF holdings last at 2,434 tonnes, up from 2,402 tonnes at the end of May. Holdings are now just eight tonnes below the peak seen in 2012 mid-March. As the chart below shows, ETF investors have generally held on to their Gold, with holdings only dipping by 1.8% over the March to June period.



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We have also compiled a list of Global exchange listed funds (ETFs) of gold.

Name of ETFAnnual fee comments

ETFS Gold Bullion Securities 0.40% Physically-backed sterling-denominated gold ETF.

ETFS Physical Gold 0.39% Physically-backed sterling-denominated gold ETF.

ETFS Physical Gold 0.39% Physically-backed dollar-denominated gold ETF.

ETFS Physical Swiss Gold 0.39%

If you don't trust the UK or US governments you may want to invest in gold held in Switzerland.

ETFS Short Gold 0.98%A way to bet on the gold price falling. Most suitable for short-

term holdings.

ETFS Leveraged Gold 0.98% Designed to deliver double the rise in gold (and double the fall).

ProShares Ultra Gold 0.95% Designed to deliver double the rise in gold (and double the fall).

SPDR Gold Trust (US: GLD) 0.40%

US-listed physically-backed gold ETF - the most popular with investors.


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Asians and their love of Gold


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India and its love of Gold


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India was the world's largest official gold market prior to 1962 when the Indian govt. banned it and smuggling began ; imports trade freed up after the reforms initiated from 1992 onwards ; The figures of the past decade are astounding, India was still the worlds largest gold market and the table below will show that Indian demand for gold has consistently been hovering around 25% of total world demand:

India and its love of Gold


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Now, as the price of gold rises the billion rupee question is: Will the amount of gold import and local jewellery demand be constant or Will the nominal rupee value of gold demand be constant resulting in lower quantity of gold demand?

The months from October to January and April and May constitute the main marriage season and also have a large number of festivals. Hence demand for gold is very strong during these months.

Gold Exchange Traded Fund (Gold ETF) was launched in India in 2007 by Benchmark Asset Management Company

The initial phase witnessed a slow but steady growth in assets, but in the past two years that the growth has accelerated...

As on June end, there were 14 funds in the Indian Gold ETF domain with a total asset holding of approx INR 10, 095 crores.

Gold ETF Comes to India


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• AMFI Data


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Option 1: The graph has been prepared using data of 9 (nine) gold funds starting 3rd Jan 11 till 31st July 2012. Here, we have removed funds of Birla Sun Life, Canara Robeco, IDBI, Motilal Oswal and Quantum. These have been removed because the data for the named funds are not available since 3rd Jan 2012 and have launched during late 2011 or in 2012.



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Option 2: The graph has been prepared using data of 5 (five) gold funds starting 3rd Jan 2011 till 31st July 2012. Here, in addition to the names mentioned above we also have removed funds of Axis, HDFC, Kotak, and Religare. These additional funds were removed as their data were overlapping with others thus making it difficult to view.



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Gold Exchange Traded Funds (Gold ETFs) have been the flavor in the past year with record volumes in year.

we have seen exceptional volumes during the traditional gold buying days of Akshay Tritiya & Dhanteras ; we also have seen a huge increase in the overall volumes in the financial year 2011-12.

Over the past year we have seen a huge rise in interest in the product from the retail as well as institutional clientele.


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Gold as bars, coins, jewelery in India


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Microsec Gold & Silver ETF options>>

Microsec MF – Imaginative Investors.......Fund Options & Innovations

Investment is all about promises. Every investment you hold assumes someone is going to give you something for it, sometime in the future.

Gold ETF – Good Investments, Financially satisfying :

Gold Jewelery – Emotionally Satisfying Happy Investments

How to merge both feelings and opportunities in one ? How to make it an attractive option ; how to Advertise that option at the correct time ?


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Microsec MF – Imaginative Investors.......Fund Options

• Microsec AMC can launch a primary Gold ETF;

• A primary Silver ETF + A Combo Gold Silver ETF

• All 3 ETF can have imaginative Fund options and a plain vanilla normal ETF option

• Subject to approvals and solutions possible, both the Gold Fund positioning and options available can be conveyed via advertising during festival season , wedding seasons.......

• Options are at the investors discretion, available to those with a certain minimum amount of units or SIP Purchase programme’s

• The Combo Precious Metals Fund.........Gold and Silver ETF (say 65% gold & 35% silver) or we can do it as a 60:30:10 Gold/silver /Platinum fund

• This can also have a Dhanteras day Special Advertising - festival fund menu ?

• This Can also be done as an Overseas redemption option with 60:30:10 option in Gold : silver : Platinum -- to be redeemed abroad by big ticket investors –

• HNI and Corporate’s, looking to diversify Portfolio and invest abroad as per RBI approvals..........


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• GOLD ETF fund options – Imaginative Investors

• Fund Options & Innovations

The Festival Fund ; Redeem ETF with money value certificates equivalent to running gold value of the day at customer option, at select stores to buy coins and bars for full value of ETF units in a clients account –

• Targeted advertising during festive season, for both urban & rural clientele

• The Wedding Fund : Same as above only exchange or redeem units for jewellery, at customer discretion, exchange ETF units , full or in part for gold at jewellery store at ruling gold values of the day< making charges at customer option & jeweler option >

• Branding as a Happiness fund and (advertising orientation) as a long term investment fund for family marriage Savings

• The Overseas Redemption Fund....Take gold abroad at a nominated bullion bank, subject to customer having RBI clearance to invest abroad( any currency risk on clients account), at the price ruling that day in the designated currency (pounds) in an approved jurisdiction (UK) –

• Target HNI and Corporates, looking to diversify Portfolio and invest abroad

Microsec MF Gold & Silver ETF


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Indian Gold Jewellery

In gold jewellery the cost of labour or making charges is between 10% (wholesale) and 15%(retail) of the gold cost!

This labour component is a loss when the gold jewellery is sold back in the market ; Often the purity is never exactly as stated and even a small loss counts.

This was part of the reason for the failure of the government gold bond schemes.If an investor were to surrender his/her jewellery which was tested and found to be of a lower quality, he or she became skeptical of the testing process.

He would lose a lot of money due to lower gold purity as well as making charges

Hence the move towards hall-marking .......and world gold Council approvals

The Microsec AMC - ETF can collaborate with WGC approved jewelery makers using hallmarked Gold only & WGC approved mints , as Bars & coins suppliers to be associated with the ETF imagination Fund options

All such options are at the investors discretion with making charges & quality assaying customised by them & the designated jewelery firms


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Gold as bars, coins, jewelery in India


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Which Silver ETF Is Right For You? SLV vs. SIVR vs. DBS

• Although silver often times lays in the shadow of investors’ number one safe haven, gold, this shiny metal has by no means lost any of its luster.

• Silver has always been one of the most popular commodities given its rich history and various ornamental and industrial uses. The white metal’s appeal as an investable asset has grown for several reasons over the years.

• Silver is often times used as an alternative (and cheaper) safe haven investment, as well as a potential hedge against inflation. Additionally, the commodity is used in a variety of industrial goods and processes, making it an interesting play on manufacturing or industrial activity.

• And thanks to the ever-expanding universe of exchange-traded products, there are now several ways investors can gain exposure to the ultra popular precious metal. Below, we outline the three most popular silver ETFs and which one will fit your investment objectives


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Silver Trust (SLV)

• Quick Stats (as of 7/26/2012)• Total Assets: $8.3 billion • Average Daily Volume: 9.2 million • Expense Ratio: 0.50% • SLV is by far the largest and most popular silver ETF available on the

market with its portfolio of just over $8.5 billion in total assets. On average, the fund exchanges hands nearly 13 million times a day. Quite simply, its sheer size and high levels of liquidity are perhaps its most appealing features. Since its inception in 2006, iShare’s SLV has been tracking the spot price of physical bullion. The fund is often used in portfolios as a part of a long-term strategy, acting as both a diversification agent and a nice safe haven investment. In addition, SLV has a very active options market as well as a healthy daily volume, making it an ideal option for more active traders

• SLV is Right for You if: You are an active trader seeking to either speculate on silver’s movements or quickly execute positions in the precious metal.


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Quick Stats (as of 7/26/2012)Total Assets: $475 million Average Daily Volume: 190,000 Expense Ratio: 0.30%

SIVR is a very similar fund to SLV in that it tracks the spot price of physical silver bullion. The major distinguishing feature between these two funds is SIVR’s strikingly lower expense ratio. SIVR charges 20 basis points less than SLV, making it a more appealing options for both long-term and cost-conscious buyers. Although the difference in expenses may seem not to have a major impact, consider two separate million dollar portfolios, one invested in SLV and the other in SIVR. The holder of the SLV portfolio will have to pay up $5,000 a year in fees, while its competitor will only have to shell out $3,000. Perhaps the $2,000 difference may not seem to be significant, but over the years the annual expense payments will add up quickly.

SIVR is Right for You if: You are a long term and cost conscious investor seeking to hold onto a silver ETF for an extended period of time.

Physical Silver Shares (SIVR)


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• Quick Stats (as of 7/26/2012)• Total Assets: $65 million • Average Daily Volume: 6,300 • Expense Ratio: 0.50% • DBS is another popular silver ETF, offering exposure to silver prices

without directly investing in physical bullion. This fund tracks the DBIQ Optimum Yield Silver Index Excess Return, a benchmark comprised of futures contracts on silver. DBS utilizes its proprietary Optimum Yield methodology to help minimize the negative effects of rolling futures contracts when markets are in contango, while at the same time maximizing the positive effects when markets experience backwardation. This unique feature has attracted many investors: since inception in 2007, DBS has accumulated more than $66.5 million in assets

• DBS is Right for You if: You are an investor who is looking to achieve silver exposure through the futures market.

DB Silver Fund (DBS)


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Shamik On Gold & Etf Presentation

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