Invest in China with just Rs 10,000 with Hang Seng BeEs ETF

After the mad rush for Gold ETF Asset Management companies were actively scouting go the next big idea to launch to seek cover for their dwindling Assets Under Management(AUM). Accordingly, Benchmark Mutual Fund will be launching an ETF based on the Hang Seng Index. Hang Seng BeEs as it is called would be listed on the NSE on Monday , 15th February. The Purpose of this EFT is to enable investors track Hang Seng Live and reveal hang seng index chart on real-time basis.

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Benchmark AMC and its Niche:

Benchmark has carved a niche for itself in the Indian Mutual Fund Industry by successfully launching first ETF in Asia(not only India) Nifty BeEs. It is also credited with launching the Gold ETF first time in India. Shariah based ETF products were first introduced to the Indian Mutual Fund Investors by Benchmark Asset Management Company.

Trade on Hang Seng Stock Exchange:

Hang Seng BeEs would be the first ETF to introduce Indian Stock Market Investors to a closed market like China. India and China are two of the fastest growing economies in the world. Indian investors would largely benefit by the diversification offered with the launch of hang seng index based ETF. Hang Seng Stock Exchange is one of the largest exchanges in the world. Hang Seng Index Charts, Hang Seng Futures, Hang Seng Historical Data can also be now be determined and tracked on a real-time basis.

Hang Seng Timings:

Hang Seng BEnchmark Exchange traded Scheme(BeEs) will trade during the Hong Stock Exchange Timings. The Heng Seng Stock Exchange closes two and half hours prior to the NSE Closing timings. The corresponding time would be between 7.30 am to 1.30 pm Indian Standard Time. The timings are better suited to Indian Stock Market traders and investors alike, compared to US Markets and European market timings. The NAV for the Scheme would also include the currency fluctuation.

Taxation Rules for Trading in Foreign ETF:

The ETF are treated as Debt funds for tax treatment and would therefore attract tax rules which are currently applicable to the non-equity funds in India. The Hang Seng Index currently comprises of 42 Stocks and is the benchmark for the China ETF in India. Rs 10,000 is all you need for your ticket to China: The units are available for a minimum amount of just Rs 10,000. To cater to large masses and enable wider market participation the entry amount is kept at Rs 10000 only. All Major Global Corporations have invested billions of dollars in the Chinese Economy. So why Indian Investor should not join the race and participate to diversify their existing portfolios?

Charges for trading on China ETF:

There are no charges levied by the AMC in form of NIL entry load and NIL exit load for buying and selling on the NSE. A minor bid/ask spread, brokerage for trading and needs to be borne by the investor. Hitherto, only High Net worth Individuals was active in using these innovative financial products. In future retail investors should add such products to their overall portfolio diversification strategy.

Kotak Gold ETF Price movement chart.

Kotak Gold ETF Price movement chart.
Below is the price movement chart for Kotak Gold ETF since 01-Jan-2008 till 28-May-2008. A trendline is also added to the chart for better understanding purpose.
The prices are the applicable NAV for corresponding period or dates.

Kotak Gold ETF Price movement chart

Kotak Gold ETF Price movement chart

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AIG World Gold Fund

AIG World Gold Fund

A Fund of Funds scheme that will invest in international securities of Gold production, processing & marketing Companies through an international fund- AIG PB Equity Fund Gold.

Scheme Features

Investment Objective The primary investment objective of the Scheme is to provide long term capital appreciation by investing predominantly in units of AIG PB Equity Fund Gold. The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes. The Scheme may also invest a certain portion of its corpus in debt and money market securities and/or units of debt/liquid schemes of Mutual Funds, in order to meet liquidity requirements from time to time.However, there is no assurance that the investment objective of the Scheme will be realized.
Indicative Asset Allocation Under normal circumstances, it is anticipated that the asset allocation shall be as follows:

Instrument Range of Allocation (% of net assets) Risk Profile
Units of AIG PB Equity Fund Gold# &/or other similar overseas mutual fund scheme(s) 80% to 100% High
Debt and money market securities and/or units of debt/liquid schemes of Domestic Mutual Funds. 0% to 20% Low to Medium

# In the units of AIG PB Equity Fund Gold, a mutual fund subject to Swiss law in the “securities funds” category as defined by the Investment Funds Act dated March 18, 1994.

The above Asset Allocation Pattern is only indicative. The investment manager may, in line with the investment objectives of the Scheme, alter the above pattern for a short term period on defensive considerations, the intention at all times being to protect the interests of the Unit Holders.

Benchmark for performance comparison Financial Times Gold Mines Total- Price Index, in USD is the benchmark of AIG PB Equity Fund Gold.The above translated to INR using the RBI Reference Rate will be the benchmark if AIG World Gold Fund.
Purchase Price for New Fund Offer (NFO) Rs.10/- per Unit for cash plus applicable Entry Load.E.g. For purchases attracting an Entry Load (2.25%), the Purchase Price = Rs. 10.225/-.

For purchases not attracting Entry Load, the Purchase Price = Rs. 10/-.

Purchase/ Redemption Price during Ongoing Offer During the Ongoing Offer period, the price for Purchases and Redemptions will be based on Applicable NAVs subject to applicable Entry and Exit Loads/ CDSC respectively.
Options available under each Plan The Scheme offers Growth option and Dividend option. The Dividend option offers Dividend Payout and Dividend Reinvestment facilities.
Minimum Application Amount & Minimum Additional Application Amount For all first time purchases, the application must be for a minimum amount of Rs. 5,000/–. For all subsequent purchases, the application must be for a minimum amount of Rs. 5,000/–.

In the case of purchases through SIP and STP, the minimum installment amount shall be Rs. 1,000/-.

The minimum amount in case of inter/ intra scheme switches shall be minimum amount required in the respective transferee scheme/plan.

Minimum Amount / Units for Redemption The minimum amount for redemption must be Rs. 1000/- or account balance whichever is less.
Expenses The entry load charged will be used to incur the expenses during New Fund Offer. Expenses in excess of the limit prescribed under the Regulations shall be borne by the AMC.
Applicable NAV For all purchase, redemption and switch transactions- For valid applications accepted:Upto 3:00 PM (Cut-off time) on a Business Day- NAV of such Business Day

After 3:00 PM (Cut-off time) on a Business Day- NAV of the following Business Day

The above will be applicable only for cheques/ drafts/ payment instructions payable locally in the city in which ISC is located. Outstation cheques/ drafts will not be accepted.

Load Structure
Particular Purchase Purchase through SIP/ STP (Applicable only in Regular Plan)
Entry Load (Applicable during New Fund Offer and Ongoing Offer)
Where the purchase amount is less than Rs. 5 crore – 2.25% of the Applicable NAV.
Where the purchase amount is Rs. 5 crore and above – Nil.
As a result of Dividend Re-investment – Nil.
1.25% of the Applicable NAV.
For each purchase application received directly * (not routed through any distributor/agent/broker)- Nil
Exit Load (Applicable during New Fund Offer and Ongoing Offer)
For investments less than Rs. 5 crores – 1.00% of the Applicable NAV if redeemed within 1 year from the date of allotment.
For investments of Rs. 5 crores and above – 0.50% of the Applicable NAV if redeemed within 6 months from the date of allotment.
If the units are redeemed within 2 years from the date of allotment – 1.00% of the Applicable NAV.
If the units are held for 2 years or more from the date of allotment – Nil.

* Directly means purchase applications (including additional purchases and switch-in) that are not routed through any distributor/agents/brokers. Such application may be marked Direct or Not Applicable in the broker code column of the application form/ transaction slip. In case of any change in the broker code column, the investor has to strike off the earlier entry, enter the new code (Direct, Not Applicable or Broker Code) and the same has to be counter signed.

Facilities Offered to Investors under the Scheme Systematic Investment Plan (SIP)

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Gold ETF beats it all……

Gold ETF beats it all……time and again…

Scheme Name 1 mth 3 mths 6 mths 1 yr 3 yrs NAV Category Structure
Gold BeES (8.53) 6.81 24.85 24.96 1171.35 ETF Open Ended
Kotak Gold ETF (8.52) 6.81 24.88 1174.80 ETF Open Ended
Reliance Gold ETF -Dividend (8.62) 6.32 1159.38 ETF Open Ended
UTI Gold ETF (8.53) 6.83 24.95 1173.83 ETF Open Ended
S&P Nifty (4.47 ) (25.94 ) (10.78 ) 24.40 31.05
BSE Sensex (6.10 ) (25.83 ) (13.69 ) 19.93 32.41
CNX500 (7.35) (31.89) (13.55) 21.52 27.57
Nasdaq 4.90 (5.34) (13.26) (3.56) 5.99
FTSE 3.11 (6.32) (9.18 ) (6.54 ) 6.69
Dow Jones 3.24 (1.49) (9.77) 0.63 6.55
Strait Times 8.08 (8.21) (16.60) (5.31) 13.49
HangSeng 4.95 (11.83) (10.04) 20.00 21.52
Kospi 5.39 (5.23) (11.83) 19.03 21.58
Taiwan Weighted 2.29 3.39 (10.58 ) 9.11 12.57
MSCI Emerging Markets Index 11.57 11.98 26.55 44.93 32.07
BSE 500 (8.37) (31.70) (13.32) 24.77 29.45
Nikkei 2.32 (9.52) (22.23) (24.17) 4.44