MUMBAI (Commodity Online): Motilal Oswal has announced a Gold ETF that enables a retail investor to take physical delivery of the metal, with the minimum being 10 grams. The fund will thus become the first Gold ETF in India that allows small investors to lay claim on the physical metal.
Even though Gold ETF's have been popular with investors, many did not allow retail investors to take delivery of the metal. Only market participants were allowed to do so and that too at a minimum of 1 Kilogram.
“The redemption of the units in minimum 10 gm gold bars will be done in association with RiddiSiddhi Bullions (RSBL), acting as primary authorised participants and market makers”, Nitin Rakesh, CEO of Motilal Oswal Asset Management said during the launch of the fund. RSBL is a leading bullion dealer in india, specializing in bars and coins of various metals like gold, silver and platinum
“This is a unique offering as it offers the best of both worlds – investment-cum-consumption – in a very cost-effective manner”, he added
Consumers will be able to buy gold at a cheaper rate than from banks or jewellers. The subscription for the fund is scheduled for Marc 02- March 16, 2012. the minimum investment is Rs 10,000 followed by multiples of Rs 1.
Motilal Oswal's Gold ETF will enable the company to tap into a niche category of investors- retail investors who would love to reclaim physical metal when they require so. As such, the fund is expected to generate huge interest from the investor community.
But what will be crucial is the price of gold. And despite a World Gold Council (WGC) report stating that Indian gold imports fell by more than 40% in Q4, 2011, India remains a key player in the global gold market primarily since domestic demand is hugely driven by factors other than investment. Additionally, with the European debt crisis and global economic outlook uncertain, investment demand is expected to get a boost in 2012.
