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.

GOLD MUTUAL FUNDS INDIA NFO(Exchange Traded Fund-ETF)

Slew of ETF(Exchange Traded Funds) for most precious commodity i.e Gold are being launched in the coming few months. BenchMark Funds, UTI, TATA Mutual Fund etc. all these fund houses are planning NFO launches for Gold Mutual Funds.
Primary objective for such funds would be to diversiy the investor’s portfolio, hedging in a relatively safe commodity and a novel instrument for investments in India.

Gold Exchange Traded Mutual Funds would be perhaps first ever to be launched in India.

Gold Mutual Funds are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that participation through the trading of a security on stock exchanges.

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Gold ETF MF’s are designed to provide returns that, before expenses, closely correspond to the returns provided by physical Gold.

Each unit is approximately equal to the price of 1 gram of Gold.

Advantages of investing in Gold/ Gold MF’s :

GOLD
• An Excellent Diversification for Portfolio.
• Global Asset Class.
• Hedge against Inflation.
• Low Volatility as compared to Equities.
• Store of value.

GOLD ETF MF’s.
• Potentially cheaper to have price exposure to gold price as compared to other available avenues
• Quick and Convenient Dealing through Demat Account
• No Storage & Security Issues for investors
• Transparent Pricing
• Taxation of Mutual Fund
• Listed and traded on stock exchanges, just like a stock-Easy Buying/Selling
• Ideal for Retail Investor as minimum lot size to trade is one unit on secondary market.
NAV of a Unit will track price of approximately 1 Gram of Gold.

Disadvantages of GOLD/ GOLD ETF MF’s:
• Though ETFs are popular abroad, it is still a new concept in India.
• Lack of expertise of Domestic Funds Managers on Gold Spot/Futures and Options prices.

Although India is one of the Largest consumer/importer of this Commodity in the world, there are very few options available for an investor in this amazing commodity purely from an investing perpestive.

This innovative product shall decide the future of other exiting product launches for a huge Gold market.


Overall view : Suscribe

Time Horizon : 3 – 5 years.
Age Group profile: None.

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