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Nippon India Gold ETF holds the 10th position globally for Year-to-Date (YTD) fund flows. Nippon India ETF Gold BeES is an exchange-traded fund (ETF) managed in a passive manner, aiming to replicate the performance of the domestic gold price benchmark. The fund achieves this objective by investing in physical gold and money market instruments.
Key details about Nippon India ETF Gold BeES include its open-ended nature, allowing investors to buy and sell through the National Stock Exchange (NSE). The fund exclusively allocates its assets to physical gold meeting a minimum fineness of 995 parts per 1000 (99.5% purity). The portfolio is strategically designed to provide returns closely linked to the performance of physical gold.
The investment fund seeks to closely track the performance of gold prices by investing in physical gold. Any discrepancies in the fund’s performance compared to the domestic price of gold may be attributed to expenses and other relevant factors.
Advantages of investing in Nippon India ETF Gold BeES
• Low Cost: Purchasing Nippon India ETF Gold BeES incurs brokerage charges, which are typically lower than markup charges for physical gold.
• Transparency: Nippon India ETF Gold BeES rates are transparent as they trade like shares on the National Stock Exchange, enabling quick buying and selling at prevailing market prices, making them highly liquid. This contrasts with the lack of consistency in pricing when buying and selling physical gold from various jewelers or banks.
• Security: Unlike physical gold, there are no security or theft concerns with Nippon India ETF Gold BeES, as they are held electronically and safeguarded in case of unforeseen circumstances.
• Margin for Trading: Nippon India ETF Gold BeES is accepted as trading margin on the NSE with an applicable haircut.
• Ability to Buy in Small Units: Each Nippon India ETF Gold BeES unit roughly equals 0.01 gram of gold, allowing direct purchase through trading terminals.
• Tax benefits: No securities transaction tax is applicable for trading Nippon India ETF Gold BeES.
• Availability: The units of Nippon India ETF Gold BeES are listed on the NSE, offering investors the convenience to purchase and sell units during trading hours, subject to the availability of buyers and sellers. Investors can place limit orders and engage in intraday trading with these units.
Asset Allocation (August 31,2024)
Asset Allocation Weightage
GOLD 995 1KG BAR 98.61%
Cash and Other Receivables 1.39%
Total 100.00%
Scheme Performance of Nippon India ETF Gold BeES (August 30, 2024)
Gold ETFs
A gold exchange-traded fund (ETF) is a financial product categorized as an investment fund that primarily deals with gold assets like gold bullion or futures contracts. These ETFs are actively traded on stock exchanges with their value closely aligned with the current market price of gold. In the recent span of four months, gold ETFs, which are available for trading on stock exchanges, have experienced significant inflows totaling Rs 4,500 crore, in comparison to Rs 4,728 crore recorded by the end of the fiscal year in March 2024.
Gold ETFs have experienced a decline in popularity among investors due to the consistent issuance of Sovereign Gold Bonds (SGBs) in recent years. These bonds offer a lucrative deal with an additional 2.5% interest annually on top of the capital gains, all without any fund management fees. Furthermore, there is no tax levied on the capital gains if the bonds are held until maturity. In the financial year 2024, investors allocated more than Rs 27,000 crore towards SGBs.
Recent speculations from various sources hint that the government might not introduce new SGB issuances. As a result, investors are turning to either purchasing gold ETFs or acquiring the existing SGBs traded on stock exchanges.
On Friday, the price of gold on the Multi Commodity Exchange (MCX) dipped to an intraday low of Rs 73,128 per 10 grams, marking a significant increase of over 1%. M
eanwhile, in the global market, gold prices are currently around $2,568.25 per ounce. Spot gold saw a 0.3% increase, reaching $2,566.59 per ounce, and gold futures set to expire in December rose by 0.6% to $2,594.70 per ounce by 23:47 ET (03:47 GMT).
During the trading session, spot gold reached a new peak of $2,570.06, while gold futures approached $2,600. The uptrend in gold prices can be attributed to investor expectations of a rate cut by the Federal Reserve at its upcoming meeting next week.