SBI MF To Launch Gold Exchange Traded Fund

SBI Mutual Fund is planning to launch gold exchange traded fund early next year.

“We should come up with some form of ETF by early next year,” said Mr O.P. Bhatt, SBI Chairman. “We will launch the product as soon as we can address the issue of why it (ETF) has not taken off,” he said. The fund expects to mobilise not less than Rs 200 crore, the Chairman said.

A country like India, which is a large consumer of gold with an annual consumption of 900 tonnes, is also one where the vast majority of the population is yet to experience the actual buying of gold, said Mr Bhatt.

“When they experience rise in incomes, the first thing they do is to buy gold. This factor alone will take the demand 5 to 10% higher per year,” he added. Today, the country is said to be in possession of 15,000 tonnes worth some $300 billion that is not put to productive use.

It has proposed a scheme for temples and Trusts whereby they can deposit their gold with SBI for which the bank may also give some incentive.

“We are speaking to temple authorities but there are issues like purity and standard of gold lying with the temple authorities,” he said.