Hi Guys!

RELIANCE GOLD EXCHANGE TRADED FUND : RELGOL

Is it worth buying this IPO?

Thanks
Baala

In the long term, gold performs even worse than a fixed deposit.

Only periods where gold can be expected to give good returns, are times of excessive inflation and uncertainty.

The returns given by gold funds will be similar to the returns given by gold.

I would not recommend anyone to invest in gold for the long term.

============================================

There are already three gold funds operating in India.

The returns give by these funds in last few months are as follows:

Gold Benchmark ETF
1 month return - 3.78%.
3 month return 9.53%.
6 return month 2.15%.

Kotak Gold ETF (Launced July -07)
1 month return - 3.79%.
3 month return - NA.
6 return month - NA.

UTI Gold ETF
1 month return - 3.79%.
3 month return 9.57%.
6 return month 2.16%.

A fixed deposit would have given greater returns than these funds.

It would be better if you look at other investment options than gold funds.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

Please suggest for investment in gold ! Why prices of gold is going up and up !

US$ is continously losing its shine from 18-24 months with comparitive to other currencies. At this time the major entities wants to shift their portfolios to some stable assets, which do not see-saw with currency price. (If "A" had 1000 USD 2 yrs ago, he get aprrox 600 UK pounds. But now "A" will get only 500 UK pounds instead of. Thus keeping ur liquid assets in USD is no more smart work!)

From ancient time gold is used as liquid and very stable asset. So with decreasing USD, more and more entities shifts to gold. And due to simple demand supply rule, gold prices are rising.

As Alchem stated earlier somewhere, investing in gold gives better returns only in times of uncertainity, u can invest in that only for short to medium period. Further as oil prices stated to cool down, and USD being stronger, gold may lose its shine.

Alchemist, your views quoted above are clear but please explain a slightly different aspect of the gold ETFs in particular and all ETFs in general.

Over the last few days, there has been a discrepancy in the gold ETF and gold spot (and future) prices. ET claims that's due to falling inventory with "gold banks". Apparently, there is a similar discrepancy in The USA as well.

One explanation offered was that gold at lower prices attracted buyers who finished off the inventory. (This implies they did so without raising the prices!). What do you think is going on?

A more general question:

Let's say a brand new gold ETF is launched.

The promoters buy gold with the money they get in their IFO. They deposit the gold with a custodian. They declare that they now have a total of XYZ units at a NAV of ABC. Of these XYZ units, IFO subscribers will be allotted 100% based on their subscription. The units are listed on the NSE.

Trading begins. I can buy or sell units through screen-based trading via my broker and my demat a/c will be credited/debited accordingly.

Now the question is: At what point, post-listing, does the AMC decide to buy more gold or sell gold it is holding? Does it then create or extinguish units?

Can or does the AMC just sit on its hands and let the issued units be traded without reference to spot prices? Is this how differences arise between the spot and ETF?

Once an ETF is listed, small investors have only one exit option - the open market.

The AMC appoints some "Authorised Participants" that trade in the open market and provide liquidity to it.

"Authorised Participants" and large investors can buy (sell) ETF units directly from (to) the mutual fund (AMC).

There is a minimum size in which ETF units can be bought/sold to the AMC.

This is known as the "creation unit".

e.g. in case of Benchmark Gold BeES, the creation unit is 1000 units (1 kg of gold).

Check out the explanation at Reliance Money's site:

Authorised Participants are usually bullion dealers.

See the list of Authorised Participants for the Benchmark Gold BeES.

I guess if there is short of physical gold, fresh "creation units" cannot be created and and the units in open markets start trading at a slight premium.

Sooner or later, the premium will vanish (or at least narrow down).

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

plz could any one tell me ---i have sold all my units of the relgold etf---but am left over with 0.45 units. how do i sell them or what else should i do to sell them, as in share trades no decimal figures are traded. but my demat statement shows i have 1 (rounded may be) unit.

help help help

how did you get 0.45 units in the first place?

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

i dont know that but ever i purchased it showed as that

I have never subscribed an ETF IPO.

Do they actually allot partial units?

I think there is nothing you can do about it.

I guess it will stay there forever.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+