Different NAV's of Gold ETF's

[Sujit]

How the NAVs of gold ETFs differ? For eg. the NAV of Reliance Gold ETF on NSE is Rs. 1554 whereas other gold etf's are at around Rs 1609. The units are 1 gm for all the gold ETF. The Quantum ETF is Rs 799 as the same is available at 0.5 gm. even if we convert it to 1 gm it comes to 1598. So it seems that Reliance Gold ETF is cheaper than others.
Though from return point of view it might be same but how the difference in NAV would influence the buying decision?

Please clarify.

[jatanr]

That could be because some of the funds may sometimes invest a small part of the corpus in other instruments such as debt.

[Alchemist]

Originally Posted by jatanr

That could be because some of the funds may sometimes invest a small part of the corpus in other instruments such as debt.

That's true.

Not all funds have 100% gold.

Also, different funds have different expense ratios.

[Sujit]

Thanks for the reply.
Now look at this:
Gold ETF prices on NSE as on 28.01.2010
RELGOLD Rs. 1554.67 per 1 unit
KOTAKGOLD Rs. 1609 per 1 unit
SBIGETS Rs 1641.89 per 1 unit.
(1 unit represents 1 gram of gold)

Spot price of Physical Gold
Spot Gold Rs.1640.95 per 1 gram
Source: http://india.thebulliondesk.com/

Thus it seems that RELGOLD is most cheap than KOTAKGOLD and SBIGETS
Does it mean we should invest in RELGOLD as it is way below other Gold ETFs as well as Physical Gold.

It seems there is something which needs clarification.
Please clarify.

[Prudent_Investor]

Returns of all gold funds are almost same, here the fmc charges plays a major role.

Refer this : Gold Etf Comparison

The best fund with minimal cost and best returns in Benchmark Gold Etf

[Sujit]

Thanks for the reply.
The return are almost same and I have mentioned the same in my first post.
But the query is:
Why the NAV of RELGOLD is substatial lower than others?
The expenses ratio for all the funds are same.
Then why the NAV of RELGOLD is 1554.67 and that of GOLDBEES is 1607? (as on 28-01-2010 on NSE)
Please clarify.

[Atiker]

In ETF's case NAV is a misnomer.

NAV is not determined and published by the Fund House, but is the last traded price.

I guess reason of low "NAV" is low liquidity which led to selling at discount.

My Rule of Thumb - Stick to the ETF with highest liquidity, if liquidity is same then select the one with lowest expense ratio. (Benchmark fits both the criteria)

[Alchemist]

Originally Posted by Atiker

NAV is not determined and published by the Fund House, but is the last traded price.

That's not true.

--------------------------------------

UTI Sunder has an NAV of 514, but is trading at 600+.

NAV's for UTI ETF's:

http://www.utimf.com/product_service...Daily_Nav.aspx

NSE Quote for UTI SUNDER:

http://nseindia.com/marketinfo/equit...name=UTISUNDER

[Alchemist]

Originally Posted by Sujit

Thanks for the reply.
The return are almost same and I have mentioned the same in my first post.
But the query is:
Why the NAV of RELGOLD is substatial lower than others?
The expenses ratio for all the funds are same.
Then why the NAV of RELGOLD is 1554.67 and that of GOLDBEES is 1607? (as on 28-01-2010 on NSE)
Please clarify.

I was looking at the performance of Reliance's Gold ETF.

It has underperformed gold by a small amount.

I think the fund was partially invested in fixed income instruments when gold prices were rising.

Thus, its 1-year return has been lower than that of gold and NAV is lower than that of other gold ETF's.

------------------------------------

According to Reliance Mutual Fund's site,

1-year return of gold = 22.73%.
1-year return of the ETF = 21.32%.

http://www.reliancemutual.com/OurSch...ed%20Fund.aspx