Birla Sun Life Mutual Fund has launched a new fund as Birla Sun Life Gold ETF, an open ended gold exchange traded fund. The investment objective is to generate returns that is in line with the performance of gold, subject to tracking error.
The investment objective of the fund is to generate returns that are in line with the performance of gold. The scheme has transparent pricing and charges no wealth tax as compared to investment in physical gold. The fund will allow the investors to reap the benefits of investing in gold with no storage and security issues making it convenient to have their gold holding in the electronic format. The fund route is ideal for accumulation as minimum lot size to trade is one unit of Gold ETF, which is approximately equal to one gram of Gold.
The Fund would invest upto 100% in Physical Gold and/or upto 5% in debt and money market instruments to meet the liquidity requirements, subject to tracking error. The scheme may buy or sell gold at different points of time during the trading session at the then prevailing prices which may or may not correspond to its closing price, due to disinvestments to meet redemptions, transactions cost and recurring expenses, execution of large buy/sell orders etc.
The New Fund Offer (NFO) will be open for subscription from April 25, and close on May 9, 2011. The unit shall be issued at a premium equivalent to the difference between the allotment price and the face value of Rs 10 each.
The minimum application amount is Rs. 6,000/- and in multiples of Rs. 2,000/- thereafter per application. The units of the scheme will be traded in dematerialized form and will charge no entry or exit load. The scheme is open to all categories of investors and provides for quick and convenient dealing through Demat accounts. The fund invests in gold with 99.5% purity sourced from London Bullion Market approved refineries.
Entry / Exit Load : Nil
Benchmark: Domestic price of physical gold
The fund manager of the scheme will be Mr. Satyabrata Mohanty. Birla Sun Life Asset Management Company Limited (BSLAMC), one of India’s top five AMCs as per average AUM as of quarter ending March 31, 2011