Reliance Gold Savings Fund

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Gold as an investment asset has given positive returns for each year during the last decade outpacing most of asset classes. Gold has provided compounded annual return in excess of 16per cent and it has appreciated by 422 per cent in absolute terms during the decade. Gold ended the decade with a bang and moved up by ~30 per cent during the year 2010 making a new high for tenth year in a row.

Physical demand for gold is extremely robust as evident from Chinese import data last month. Similarly, Gold imports in India, the world’s largest gold consumer, have likely reached a record last year driven by investment demand according to World Gold Council. As per market sources total gold imports in India amounted to around 750 tons during 2010 compared to around 557 MnT of gold imports in 2009. Gold investment demand in India surges 73 per cent in the year ended Sept, 2010. Gold held by all known Exchange Traded Funds (ETFS) globally as per Bloomberg is 67 Mn Oz as on 11 Jan, 2010 after reaching a record high of 68 Mn Oz during December, 2010.

Outlook:

2010 was the tenth year in a row where gold provided positive return. Gold prices reached a record high of 1431.25 USD/Oz before correcting lower toward 1353 USD/Oz. Gold currently trades at around 1384 USD/Oz. Gold prices generally tend to correct lower along with other financial markets during the initial corrective phase but tends to appreciate after the initial decline. Gold will continue to benefit due to lower interest rate regime globally, higher inflation expectation, European debts concerns and thrust for portfolio diversification. Gold may correct over short term, but and that should be seen as an opportunity to buy gold. Long term prudent investors should keep accumulating gold in a phased manner.

Reliance Gold Savings Fund

Reliance Gold Savings Fund, is the first fund of fund in the industry which opens a new panorama for investing in gold as an asset class. The fund seeks to provide returns that closely correspond to the returns provided by Reliance Gold Exchange Traded Fund, which in turn invest in physical gold. It is a passively managed fund which would enable an investor to save for gold in a convenient manner either through lump sum investment or through systematic investment - the mutual fund way from a long term perspective. It will give investors the opportunity to participate in the bullion market in a relatively cost effective and convenient way.

Investment Philosophy:

A modern way of accumulating “Gold” the mutual fund way. An investment opportunity which enables an investor to allocate gold a foundation asset to his portfolio in a systematic way. This fund would enable you to add the yellow metal which is considered as a safe haven, hedge to inflation and diversify your portfolio in a convenient way. The fund Invests exclusively in Reliance Gold Exchange Traded Fund which in turn invests in physical gold which shall be of fineness (or purity) of 995 parts per 1000 (99.5 %) or higher. The fund also provides the SIP route to enable investors to invest a fixed sum of money on a monthly or quarterly basis, thereby eliminating the need to time the markets. Investing in gold through the Reliance gold Savings Fund in physical application mode enables you invest in a low cost manner as the investor does not have to incur charges like annual maintenance charges for demat account , delivery brokerages charges, transaction charges incurred for investing through the dematerialized mode.

The minimum investment amount under the scheme is just Rs.5000. The new fund offer (NFO) closes on February 28, 2011.