Kotak Mahindra Gold ETF Review and Analysis of Returns,Expense Ratio,Dividends, Price Performance History, and how to buy SIP

INTRODUCTION

Gold ETFs have become the fastest growing segment of buying gold in India with most people preferring the convenience and ease of buying gold the demat way.Note only does it have the security and storage advantages,it is also easily salable without a huge transaction costs.Its no wonder that most asset management companies in India have launched gold etf products to take advantage of the growing trend of  buying gold Etfs in India.Kotak Mahindra which is one of the biggest private banks with operations in almost all aspects of Finance like Investing Banking,Wealth Management has launched a good Gold ETF products as well.It is an open-ended gold Exchange Traded Fund, which invests in physical gold and  tracks the domestic spot price of gold as closely as possible.  Units of the scheme listed on stock exchanges and can be easily traded in demat form. Each unit of the scheme is approximately equal to 1 gram of gold. Units of the schemes are backed by physical gold held by the Custodian – Scotia Macotta. All physical gold held with Scotia Macotta conforms to the London Bullion Market Association’s (LBMA) rules for Good Delivery.
The investment objective of Kotak Gold ETF is to generate returns that are in line with the returns on investment in physical gold, subject to tracking error.

How to Invest in Kotak Gold ETF Online in 4 Steps –

Online:

Step 1: Open an online trading and demat account with a broker affiliated with National Stock Exchange.
Step 2: Log on to the web site of an online trading portal ie. www.kotaksecurities.com. Use your login ID & password to access your account.
Step 3: Place the buy order for the purchase of specified number of Kotak Gold ETF Units (NSE script code for Kotak Gold ETF is “KOTAKGOLD”)
Step 4: Web system debits your bank account and credits your demat account with the units on trade date + 2 day.
Similar process applies for sale transactions.

All investors including Authorized Participants, Large investors and other investors may sell their units in the Stock Exchange on which these units are listed on all the trading days of the Stock Exchange. Mutual Fund will repurchase units from AP’s and LI’s on any business day provided the value of units offered for repurchase is not less than creation units size.

Kotak Mahindra Gold ETF Symbol

Symbol – KGETF

Kotak Gold ETF Performance

Kotak Gold ETF 15.20%
Scheme Benchmark – Physical Gold Price 16.36% (as on 30thJune 2011)
KGETF has under performed its benchmark by about 1% since inception and this is inline/better with the rest of the Gold ETF’s

Kotak Mahindra Gold ETF Fund Manager, Investment Manager,Trustee and Custodian

Fund Manager – Mr. Abhishek Bisen
Investment Manager – Kotak Mahindra AMC Ltd.
Trustee – Kotak Mahindra Trustee Co. Ltd.
Custodian – Scotia Macotta.

Kotak Mahindra Gold ETF Benchmark

The Kotak Mahindra Gold ETF Benchmark is the Domestic price of Gold. . Purity of Gold – All gold bullion held in the scheme’s allocated account with the custodian shall be at least 99.5% pure.

Kotak Mahindra Gold ETF Expense Ratio, Tracking Error

The expense ratio of KGEFT is 1% is equal to or  better  than other Indian gold etfs in the market.
Entry load & Exit load – Nil
Tracking Error – 0.058 (Tracking error is annualized & calculated since inception till September 30th, 2010).

NAV,Asset Under Management, Exchange listed & Gold Holding

NAV – Rs. 2129.68 (as on 30th June 2011)
AUM – Rs.870.35Crs
Gold holding – 2003 Kgs
Allotment Date – 27 July, 2007
Exchange Listed – NSE & BSE

Kotak Mahindra Gold ETF Unit

Pricing per unit – Approximately 1 gram of gold
Minimum Investment – 1 unit
Creation Size – 1000 units.

Kotak Mahindra Gold ETF Systematic Investment Plan (SIP)

The benefits of an SIP is known to all. One can make investments as small as Rs 100, monthly or quarterly. It means a commitment to invest a fixed amount in a fixed time. The ETFs do not currently give an option of investing through SIPs. However, one can easily do so with his own will. Set a particular amount to be invested every month by setting reminders. This way, one can enjoy the benefits of SIP. One can also talk to his broker to allow SIP. Some brokers like Religare give the facility of SIP investing in shares & ETFs.

Kotak Mahindra gives the option of SIP on its mutual funds.

Also Read about

1) Best Gold ETF Fund in India

2) Ways to Invest in Gold in India

3) Reliance Gold ETF