Thursday, July 24, 2008

SBI Gold Exchange Traded Fund Set To Float Soon - July 24, 2008

The SBI Mutual Fund has filed the offer document with the Securities and Exchange Board of India (Sebi) for launching a dedicated scheme of SBI Gold Exchange Traded Fund.

The objective of SBI Gold Exchange Traded Fund (SBI GETS) 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.

The open-ended Gold Exchange Traded scheme would be available in retail and institutional plan. Plan A will be available for retail investors and Plan B will be opened for institutional investors. Dividend and growth both options are offered under the Scheme. Dividend option is offered with reinvestment and payout facility.

Minimum investment amount is Rs 5,000 under NFO while during continuous offer - minimum-trading lot for SBI GETS units in the market will be 1 unit on the stock exchange where the units are listed.

The scheme seeks to collect Rs 1 crore as minimum subscription amount.

The SBI GETS will have an exposure of 90-100% in gold and gold related securities with medium and high-risk profile. While 0-10% of net asset of the fund will be invested in debt and money market instruments.

The scheme may charge different entry load for Plan A and B.

Under Plan A, investment up to 1 lakh may attract 1.50% an entry load, it reduced to 1.00% for the investment amount of Rs 1 lakh to Rs 5 lakh. For the purchase amount of Rs 5 lakh to 50 lakh, there will be 0.75% as an entry load and 0.50% for the application amount of Rs 50 lakh to Rs 1 crore.

Plan B may not levy entry load.

Both Plan A and B will not ask any exit load.

The price of the Gold is the Benchmark. The price refers to, the morning fixing of Gold by London Bullion Market association (LBMA). Sudanshu Asthana is the Fund Manager of the scheme.

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