rgetf oct
TRANSCRIPT
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1 Product/PN/Ver1.0/Oct,2011
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2 Product/PN/Ver1.0/Oct,2011
PPoossii tt iioonniinnggoofftthheeFFuunnddReliance Gold Exchange Traded Fund is a passively managed exchange traded fund whichendeavors to track and provide similar returns to its benchmark- the domestic prices of gold,
through investment in physical gold and money market instruments.
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A smart, and easy way to invest in Gold in a demat form. An Investment Opportunity which enables aninvestor to allocate gold to his portfolio
Open-ended exchange traded fund easy entry & exit through the stock exchange (NSE/BSE).
Invests exclusively in physical gold which shall be of fineness( or purity) of 995 parts per 1000 (
99.5 % ) or higher
Portfolio focused on providing returns that closely correspond to the returns provided by physical
gold.
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Low cost : When you buy RGETF you have to pay brokerage charges, which
is usually much lower than paying for making charges when you buy physical
gold.
Transparency: RGETF, the rates are transparent as they are traded like a share
on the National Stock Exchange and therefore it provides the ability to buy and
sell them quickly at the ruling market price and therefore highly liquid. There is no
consistency when you buy and sell physical gold across jewellers or banks
Safety & Security: Zero concerns about security, theft. Safeguard in the form of
electronic mode in the case of unforeseen circumstances where you have lost all
the physical wealth
Collateral for trading on NSE: RGETF is accepted as collateral for trading on
National Stock Exchange of India Ltd.
Abil ity to buy in small un its: RGETF one unit is approximately equal to one gram of
gold which can be directly bought through the trading terminals.
No securities transaction tax for trading RGETF on the National Stock Exchange Of
India Ltd . Wealth tax is also Nil.
Feasibility: RGETF units are available on NSE and BSE which provides feasibility to the investor
to buy and sell the units during trading hours of the exchange. It enables to to limit orders as well
as permits intraday trading.
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3 Product/PN/Ver1.0/Oct,2011
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Overview:
Global financial markets remain fragile and volatile. The only thing being discussed globally is the
European sovereign debt. Concerns over Greek default and its impact on other European nations is
driving down global financial markets. Greece being a small nation has a limited impact on global
economy. Greece is not alone with its sovereign debt problems; Italy and Spain will have a much more
severe impact. Italys economy is around 7 times larger than Greeces economy. Any concerns over Italy
have the potential to have a magnified impact on global growth. Such concerns are being reflected in cost
of funding. Funding cost for Italy has spiked up above 7% vis--vis average of 5.6% (year till date). The
spike in interest cost acts as a major road block to growth momentum. Again, Sovereign debt crisis in
Europe has increase the default risk and that may lead to huge losses for landing banks.
US dollar tends to benefit during such environment due to lack of alternative currency hedge. Dollar index
is currently hovering around 77.84 after hitting a low of 74.724 during 27 October, 2011. Euro is the worst
hit by sovereign crisis. Japanese and Swiss National banks are trying their best to keep their currency
depreciated, as appreciating local currency hurts their economy. In absence of any meaningful alternative
people tend to park money in US treasury thereby increasing the demand for US dollar. The current spike
in dollar indicate risk aversion among investors which is generally bullish for gold prices.
Indian gold prices are at record high levels of Rs 29300/10grams on back of weaker rupee. Indian goldprice become more pricy when rupee weakens. Rupee is currently hovering around Rs 50.60/ USD and
has depreciated by 14.9 % since the end of July, 2011. International gold prices are well below their all
time high ~1921 USD/Oz reached during 6th September, 2011. Gold prices are currently hovering around
1780 USD/Oz after hitting a low of 1532 USD/Oz on 26 September, 2011. Volatility across asset class is
on a rise and can be attributed to lowering of risk appetite among many investors who refrain from active
trading.
Globally, golds investment flows in November (till 14th November, 2011) remained healthy, ETPs
(Exchange Traded Products) have seen a net increase of 28 tones, more than the net inflows of entire
month of October, 2011. Physical demand during the month of October, 2011 was driven by festival
buying. Dhanteras and Deepavali are seen as auspicious days for buying gold and demand remained
robust during that period. The physical premium, i.e. difference between domestic prices of gold and
international prices of gold converted into Indian rupees and adjusted for taxes and duties, shooted up
sharply during this period indicating a strong physical demand in India. Generally, the strong physical
demand is followed by spike up in international gold prices.
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Outlook:
The sovereign debt crisis seems to be engulfing global growth. German investors confidence fell to a
three year low in November, 2011 on concerns that debt crisis will drive Europes largest economy into
recession. Credit spreads and credit default swaps are widening. The Spanish-German spread widened
to a euro-lifetime high of 453 basis points.
It is very hard to imagine bullish factors supporting gold prices will die out any time soon. US and Europe
is not likely to come out of dumps any time soon. They may be able to suppress the problem for time
being but it is almost impossible to bring a permanent solution to this problem without going through a
very painful process. Infusion of liquidity will be the most likely temporary solution, but the longer term
undesirable impact of same is higher inflation numbers and higher inflation is supportive of gold prices.
The really need of the hour is austerity measures but they are hard to implement, as it requires lots ofnational sacrifice and compromise. Such measures will lead to lots of social unrest and political tensions.
Referendum in Greece is a good example for the same. These coupled with other geopolitical tensions
provides a conducive environment for gold bulls.
Gold does not have statistically significant correlation with other financial assets and has comparatively
lower volatility. Hence, besides being an absolute performer, gold may be consider for portfolio
diversification.
The long term outlook for gold looks positive. Any correction can be looked at opportunity to accumulate,
and long term prudent investor should continue investing in gold in a systemic manner as it may help inimproving risk adjusted returns for the portfolio.
Common Source for Gold View as on 15thNovember, 2011: Bloomberg, Reuters, World Gold Council
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Gold 995 1 KG BAR 100.32 %
Cash and Other Receivables-0.32%
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Investment Objective
The investment objective is to seek to provide returns that closelycorrespond to returns provided by price of gold through investment inphysical Gold (and Gold related securities as permitted by Regulatorsfrom time to time). However, performance of the scheme may differ fromthat of the domestic prices of Gold due to expenses and or other relatedfactors.
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Inception Date November 22, 2007
Minimum Investment
On the Exchange:Any investor eligible to trade on the exchange canbuy minimum one unit of Reliance Gold ETF which is approximatelyequal to 1 gram of gold on NSE/BSE
Through the AMC:Purchases directly from the Mutual Fund is restrictedto Authorized Participants as appointed by the AMC provided the value ofunits to be purchased is in creation unit size of 1000 units and cashcomponent if any. In addition to authorized participant(s) Reliance GoldSavings Fund can also buy / sell the units from the fund in Creation Unit Size.
Load Structure
Entry Load* :Not Applicable*In terms of SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, noentry load will be charged by the Scheme to the investor effective August 1, 2009. Upfrontcommission shall be paid directly by the investor to the AMFI registered Distributors basedon the investors' assessment of various factors including the service rendered by thedistributor
Exit Load: Nil
Purity of GoldAll gold bullion held in the scheme's allocated account with the custodian
shall be of fineness (or purity) of 995 parts per 1000 (99.5%) or higher
Benchmark
As there are no indices catering to the gold sector/securities linked to Gold,
currently Reliance Gold Exchange Traded Fund is benchmarked against the price
of Gold
Fund Manager Hiren Chandaria
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The units of the fund are currently available on National Stock Exchange Of India Ltd (NSE) and Bombay
Stock Exchange Ltd (BSE). An investor can directly buy and sell the units of scheme through the broker
associated with NSE/BSE and he would receive the units in his demat account on a T+2 rolling settlement
NSE Code/BSE Scrip Id RELGOLD
BSE Scrip 590100
Pricing (per unit) One unit= Approx one gram of gold
Minimum Investment On the Exchange: One unit
Through the AMC(only for Authorised Participants as appointed by
the AMC) : 1000 units
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DDiissccllaaiimmeerrss
The views expressed herein constitute only the opinions and do not constitute any guidelines or recommendation on any course of
action to be followed by the reader. This information is meant for general reading purposes only and is not meant to serve as a
professional guide for the readers. Certain factual and statistical (both historical and projected) industry and market data and other
information was obtained by RCAM from independent, third-party sources that it deems to be reliable, some of which have been
cited above. However, RCAM has not independently verified any of such data or other information, or the reasonableness of the
assumptions upon which such data and other information was based, and there can be no assurance as to the accuracy of such
data and other information. Further, many of the statements and assertions contained in these materials reflect the belief of RCAM,
which belief may be based in whole or in part on such data and other information.
The Sponsor, the Investment Manager, the Trustee or any of their respective directors, employees, affiliates or representatives do
not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Whilst no
action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate
and opinions given are fair and reasonable. This information is not intended to be an offer or solicitation for the purchase or sale of
any financial product or instrument. Recipients of this information should rely on information/data arising out of their own
investigations. Readers are advised to seek independent professional advice, verify the contents and arrive at an informed
investment decision before making any investments.
None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or representatives shall
be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in
any way from the information contained in this material.
The Sponsor, the Investment Manager, the Trustee, any of their respective directors, employees including the fund managers,
affiliates, representatives including persons involved in the preparation or issuance of this material may from time to time, have long
or short positions in, and buy or sell the securities thereof, of company(ies) / specific economic sectors mentioned herein.
Statutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act,
1882. Sponsor: Reliance Capital Limited. Trustee: Reliance Capital Trustee Company Limited. Investment Manager:Reliance
Capital Asset Management Limited (Registered Office of Trustee & Investment Manager: 'H' Block,1st Floor,
Dhirubhai Ambani Knowledge City, Koparkhairne, Navi Mumbai - 400 710, Maharashtra. . The Sponsor, the Trustee and the
Investment Manager are incorporated under the Companies Act 1956. The Sponsor is not responsible or liable for any loss resulting
from the operation of the Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and suchother accretions and additions to the corpus.
Reliance Gold Exchange Traded Fund (An open-ended Gold Exchange Traded Fund that tracks the domestic prices of gold
through investments in physical Gold.) : The investment objective is to seek to provide returns that closely correspond to returns
provided by price of gold through investment in physical Gold (and Gold related securities as permitted by Regulators from time to
time). However, the performance of the scheme may differ from that of the domestic prices of Gold due to expenses and or other
related factors.
Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the
objectives of the Scheme will be achieved. As with any 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 capital markets. Reliance Gold Exchange
Traded Fund is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme, its
future prospects or returns. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the
Scheme. The Mutual Fund is not guaranteeing or assuring any dividend. The Mutual Fund is also not assuring that it will makeperiodical dividend distributions, though it has every intention of doing so. All dividend distributions are subject to the availability of
the distributable surplus in the Scheme. For details of scheme features apart from those mentioned above and scheme specific risk
factors, please refer to the provisions of the Scheme Information Document. Scheme Information Document and KIM cum
application form is available at all the DISCs/ Distributors of RMF/www.reliancemutual.com. It is to be distinctively understood that
the permission given by the NSE should not in any way be deemed or construed that the Scheme Information Document has been
cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of Scheme Information
Document. The investors are advised to refer to the Scheme Information Document for the full text of Disclaimer Clause of
NSE. Please read the Scheme Information Document and Statement of Additi onal Information carefully before investing .