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Gold Bees ETF India Review

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Goldman Sachs GoldBees – A bit of history

The Bees lineup of ETFs was started by Benchmark Asset Management Company which was a unique Indian AMC in the sense that it focused on ETFs at a time when the major Indian AMCs did not care a hoot.However ETFs in India are starting to catch on rapidly as Indian mutual funds under perform despite their very high expense ratios.Recognizing this trend of growing AUM of ETFs,Goldman Sachs acquired the still small Benchmark.With effect from 14th July 2011, both Benchmark Asset Management Company Private Limited and Benchmark Trustee Company Private Limited became a part of the Goldman Sachs group. Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. It was founded in 1869 & is one of the oldest and largest investment banking firms.

Goldman Sachs Gold ETF Fund& Investment Objective,Dividend Policy:

Goldman Sachs Gold ETF is an open ended gold scheme. It was previously known as Gold Benchmark Exchange Traded Scheme.The Benchmark or the newly named Goldman Sachs Gold BeES is the most widely traded gold ETF in the Indian market.The minium lot size is 1 gram of gold which is the unit size while the Creation Unit is 1000 units or 1 kg of gold. Performance wise, it is giving better returns than the others.

The fund offers only Growth Option. However, the Trustee may still declare Dividend from time to time in accordance with the Dividend Policy.The investment objective of Goldman Sachs Gold Exchange Traded Scheme (GS Gold BeES) is to provide returns that, before expenses, closely correspond to the returns provided by domestic price of gold through physical gold

GoldBees Things to Remember

  • Type of Fund – Non-Equity Exchange Traded Fund Linked to Gold
  • Investment – Physical Gold
  • AMC – Goldman Sachs Asset Management (India) Private Limited
  • Fund Manager – Vishal Jain
  • Benchmark – Domestic Price of Gold
  • Exchange Listed – National Stock Exchange
  • Inception Date – March 8, 2007
  • NSE Symbol – GOLDBEES.NS
  • BSE Code – 590095
  • Pricing (Per Unit) – 1 gram of gold
  • Creation Unit – 1,000
  • Expense Ratio – 1%
  • Entry / Exit Load – Nil
  • AUM – Rs.2,254.97 (in crores)
  • No. Of Investors – 153,165

GoldBees Asset Allocation

Physical gold – 90% to 100%
Money Market Instruments, securitised debts, bonds, including cash at call – 0% to 10%.

GoldBees Units & Exchange

The Units of the Schemes are listed on the Capital Market Segment of the National Stock Exchange of India Ltd. On NSE, the Units of Schemes can be Purchased / sold in a minimum lot of 1 Unit and in multiples thereof. The Fund creates / Redeems Units of the Schemes in Creation (1000) Unit size (minimum) by exchange of underlying Securities and Cash Component.

GoldBees Performance

Compounded Annualized Returns as on July 29, 2011:
GS Gold BeES – 21.78%, Domestic Price of Gold 22.88% (Since Inception)
GS Gold BeES – 21.66%, Domestic Price of Gold 22.76% (Last Three Years)
GS Gold BeES – 29.49%, Domestic Price of Gold 30.81% (Last One Year)
GS Gold BeES – 15.44%, Domestic Price of Gold 16.01% (Last Six Months)
GS Gold BeES – 4.53%, Domestic Price of Gold 4.80% (Last Three Months)
GS Gold BeES – 5.49%, Domestic Price of Gold 5.57% (Last One Month)

Returns since inception are calculated from the date of allotment i.e. July 8, 2003. Dividends are assumed to be reinvested at the prevailing NAV. After payment of Dividend, NAV will fall to the extent of the payout and statutory levy (if applicable).

The performance of Gold Bees is probably the best amongst the Indian Gold ETF Funds and its expense ratio is the lowest as well.Though a number of Indian Mutual Fund Companies have launched their own Gold ETF offerings ,they have nothing new on offer and most of them are worst in terms of expense ratio and performance.

How to Trade GS Gold BeES

On the NSE :
The minimum Lot Size is 1 Unit. The applicable price is the price available on NSE
Any Investor is eligible for trading. One should know the NSE ticker of the ETF then he needs to contact the broker, place an order & receive the units on T+2 days. It functions just like any other share.

Directly with the Fund :
Only Authorised Participants are eligible to trade here & the minimum Lot Size is 1000 units. The Price is 1 kilogram of physical gold of 99.5% purity and cash.

GoldBees ETF India Review

Benchmark Gold ETF Gold BeEs is the best ETF option amongst the ETFs available in India due to its very low expense ratio of 1% compared to the 2.5% charged by most of the other ETFs.Note Benchmark is the best asset management company in terms of the variety and expense of ETFs.I would recommend Gold BeEs is the preferred investment vehicle of choice for buying Gold in India.Last of all Gold BeEs has the most volume which means it has the least impact cost while buying and selling the Gold ETF.

Read about the Best Gold ETF Fund in India


Abhishek Shah

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