HDFC Gold ETF Fund (NFO Closes on 23-Jul-10)

1 oz (Troy ounce) of fine gold

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HDFC Gold ETF Fund (NFO Closes on 23-Jul-10)

Some interesting facts about Gold:

Demand and supply balance

As a hedge against inflation and store of value

Gold provides effective diversification for investment portfolios by exhibiting low long term correlation with other asset classes

As a safe haven in times of financial, economic and political crises

Gold is so rare that the world pours more steel in an hour that it has poured gold since the beginning of time

Gold has lustrous beauty, it’s easily workable, it is rare, and it is virtually indestructible - four characteristics that no other precious metal possess

All the gold in the world could be compressed into an 18 yard cube*

Experts estimate that there are only 41,000# tons of gold left in the earth to mine

Sources of demand for gold are extremely diverse – both geographically and sectorally – as compared to those of many other assets

Gold demand is predominantly discretionary unlike most commodities and hence less exposed to the vagaries (i.e. unpredictability) of the economic cycle

These factors explain the independence of the gold price and why demand has remained robust in the face of a rally that has spanned several years

Sources of Gold Demand

Jewellery (68%): Consistently accounts for 2/3rds of demand. Amounted to US$ 61bn in 12 months ending Dec. 2008, making it one of the largest consumer goods in the world.

Investment (19%):

Identifiable investment demand in gold has increased considerably in recent years. Since 2003, investment has represented the strongest source of growth in demand. Wide range of reasons and motivations for people and institutions to invest in gold.

Industrial (14%): Over half of industrial demand arises from its use in electrical components. Used in various medical and Bio-medical applications. Recent research has uncovered number of new uses like catalyst in fuel Cells, chemical processing and controlling pollution.

Why invest in GOLD ETF? What are the benefits?
 Low cost: When you buy RGETF you only have to pay brokerage charges, which is usually much lower than paying for making charges when you buy physical gold.

Transparency: GETF, the rates are transparent as they are traded like a share on the National Stock Exchange and therefore it provides the ability to buy and sell them quickly at the ruling market price and therefore highly liquid. There is no consistency when you buy and sell physical gold across jewellers or banks

 Safety & Security: Zero concerns about security, theft. Safeguard in the form of electronic mode in the case of unforeseen circumstances where you have lost all the physical wealth

 Collateral for trading on NSE: GETF is accepted as collateral for trading on National Stock Exchange of India Ltd.

 Ability to buy in small units: GETF one unit is approximately equal to one gram of gold which can be directly bought through the trading terminals.

 No securities transaction tax for trading GETF on the National Stock Exchange Of India Ltd . Wealth tax is also Nil.

Feasibility: Gold ETF units are available on NSE and BSE which provides feasibility to the investor to buy and sell the units during trading hours of the exchange. It enables to to limit orders as well as permits intraday trading.

You can buy any of the following Gold ETF as all are giving same return.

Religare Gold ETF

Gold Benchmark ETF


Kotak Gold ETF

Reliance Gold ETF

Quantum Gold


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