Smart Money Inc. A golden opportunity to invest in gold: SBI Gold Fund

What is SBI Gold Fund? SBI Gold Fund is an open ended Fund of Fund (FOF) scheme that invests predominantly in the units of SBI Gold Exchange Traded Scheme (SBI GETS). The scheme seeks to provide returns that closely correspond to returns provided by SBI Gold Exchange Traded Scheme (SBI GETS). You can invest in SBI Gold Fund just like any other mutual fund scheme without the hassles of opening a demat account, providing you an opportunity to take exposure into Gold as an asset class, in a convenient way. SBI Gold Fund benefits No need to hold or open a DEMAT account: SBI Gold fund provides an opportunity for the investor, to take exposure into Gold as an asset class, in smaller and convenient investment amount without having a demat account.   Liquidity: An investor can subscribe and redeem gold fund on all business days.   Cost Effective: Investing in gold through the SBI Gold Fund in physical application mode enables you to invest in a low cost manner as the investor does not have to incur expenses like annual maintenance charges for demat account , delivery /brokerages charges or transaction charges incurred for investing through the dematerialized mode. However, investors will be bearing the recurring expenses of the scheme, in addition to the expenses of the underlying Scheme.   Tax Benefits: SBI Gold Fund is treated as a non equity product from tax perspective. It enables an investor to claim long term capital gains tax after a period of one year of investments, whereas for physical gold long term taxation is available after 3 years.   Assured Purity & Security: SBI Gold Fund would invest in units of SBI Gold Exchange Trade Scheme (SBI GETS) and all gold bullion held in SBI GETS shall be of fineness of 995 parts per 1000 and it will be held safe with the custodian. Performance of SIP in gold SBI Gold Fund enables you to invest in gold through Systematic Investment Plan (SIP), thus inculcating a regular savings habit to your investments. This ensures that you can reap the benefits of investing in gold through a small but regular amount. The following table shows the SIP returns in Gold for the past 10 years. It is seen that Gold has displayed a consistency in performance. Source: Bloomberg. Returns are as on 29/07/2011 with SIP being done on 1st of every month. Returns are CAGR & have been calculated for cash flows at different point of time using XIRR function in excel spreadsheet for LBMA AM Fix closing prices converted into INR. Past performance may or may not be sustained in the future.
The investor will be bearing the recurring expenses of the Scheme, in addition to the expenses of underlying scheme. Name of Scheme: SBI Gold Fund Type of Scheme: An open ended fund of fund scheme Investment Objective: The investment objective of the Scheme is to seek to provide returns that closely correspond to returns provided by SBI Gold Exchange Traded Scheme (SBI GETS). Asset Allocation: Units of SBI GETS - 95% to 100%, Reverse repo and /or CBLO and/or short-term fixed deposits and/or Schemes which invest predominantly in the money market securities or Liquid Schemes*- 0 to 5%, The Scheme shall not invest in securitized debt. *The Fund Manager may invest in Liquid Schemes of SBI Mutual Fund. However, the Fund Manager may invest in any other scheme of a mutual fund registered with SEBI, which invest predominantly in the money market securities. Minimum Investment size: Rs. 5000/- and in multiples of Rs. 1/- thereafter Investment options: Growth & Dividend (Payout & Reinvestment) Load Structure: Entry Load: Not Applicable Exit Load: Exit within 1 year from the date of allotment - 1%, Exit after 1 year from the date of allotment - Nil Terms of Issue: Sale of units - Rs. 10/- per unit during NFO and at NAV related prices on all business days on continuous basis, Liquidity: The scheme would provide repurchase facility to investors on an ongoing basis on all business day. Investor benefits and general services offered - The Scheme offers Systematic Investment Plan during the NFO period. NAV of the Scheme would be computed and declared on all business day. AMC shall disclose the NAV on the AMFI website (www.amfiindia.com) and on the website of the Fund by 10.00 a.m. the following business day. Risk Factors: Mutual Funds and Securities Investments are subject to market risks and there is no assurance or guarantee that the objective of scheme will be achieved. As with any other investment in securities, the NAV of the Units issued under the scheme can go up or down depending on the factors and forces affecting the securities market. Past performance of the Sponsor/AMC/Mutual Fund/Scheme(s) and their affiliates do not indicate the future performance of the scheme of the Mutual Fund. SBI Gold Fund is only the name of the scheme and does not, in any manner, indicates either the quality of the scheme or its future prospects and returns. SBI Gold Fund would be investing in the units of SBI GETS. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the underlying scheme of mutual funds wherein the Scheme has invested. As a result, the time taken by the Mutual Fund for the redemption of units may be significant in the event of a high number of redemption requests or a restructuring of the scheme. The Mutual Fund is not assuring any dividend nor is it assuring that it will make any dividend distributions. All dividend distributions are subject to the availability of distributable surplus and would depend on the performance of the scheme. The Scheme's NAV will react to the prices of gold. The investor could lose money over short periods due to fluctuation in the Scheme's NAV in response to factors such as economic and political developments, changes in interest rates and perceived trends in gold prices, market movements and over longer periods during market upturns. Additionally, the prices of gold may be affected by several factors such as global gold supply and demand, investors' expectations with respect to the rate of inflation, currency exchange rates, interest rates, etc. Crises may motivate large-scale sales of gold, which could decrease the domestic price of gold. The Investor will be bearing the recurring expenses of the Scheme, in addition to the expenses of underlying Scheme and also risk of the underlying Scheme. The Scheme (at Portfolio level) to have >/= 20 investors and no investor to account for > 25% of the corpus of the Scheme. In case of non fulfillment with either of the above two conditions, the AMC shall comply with the specified SEBI Guidelines in this regard. The Mutual Fund is not assuring any returns nor is it assuring that it will make periodic distributions by way of dividends. Statutory details: SBI Mutual Fund has been set up as a trust under the Indian Trusts Act, 1882. State Bank of India ('SBI'), the sponsor is not responsible or liable for any loss resulting from the operation of the schemes beyond the initial contribution made by it of an amount of Rs. 5 lakhs towards setting up of the mutual fund. Asset Management Company: SBI Funds Management Private Limited (A joint venture between SBI & AMUNDI). Trustee Company: SBI Mutual Fund Trustee Company Private Limited. A copy of the Scheme Information Document & Statement of Additional Information and Key Information Memorandum alongwith the application form may be obtained from our ISC's, ISD's, SBI Mutual Fund Corporate Office, SBI MF agents or can be downloaded from website - www.sbimf.com. Please read the Scheme Information Document & Statement of Additional Information carefully before investing.

 

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with regards

Zoher Doctor / Smart Money Inc
Financial Planner

+91 9824063400 

 

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Disclaimer
Information, charts or examples contained in this mail is for illustration and educational purposes only. It should not be considered as advice or an endorsement to purchase or sell any security or its financial instrument until you are well conversant and confident about the movement.
 
For indiviual guidance please write to me seperately at zoherdoctor@gmail.com
 
 
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