The investment objective of Gold Benchmark Exchange Traded Scheme (Gold BeES) is to provide returns that, before expenses, closely correspond to the returns provided by domestic price of gold through physical Gold.
However, the performance of Scheme may differ from that of the domestic prices of Gold due to expenses and certain other factors. There can be no assurance or guarantee that the investment objective of Gold BeES will be achieved.
Gold BeES is an open-ended passively managed Exchange Traded Fund (ETF), launched by Benchmark Mutual Fund. The fund is designed to provide returns (before expenses) that closely correspond to the returns provided by the domestic price of gold. This makes Gold BeES, the first Gold ETF in the country, a unique investment opportunity for investors looking to invest in gold.
Gold BeES offers investors a convenient means to invest in gold without the hassles of storage and without compromising on the quality. Being an ETF, it will be traded on the stock exchange (to begin with on the National Stock Exchange-NSE) after the new fund offer (NFO) period. This means that investors can buy and sell units of Gold BeES on the stock exchange on a real time basis (i.e. buying/selling can be done any time during the trading hours) and not after market hours.
For investing in the Gold BeES, investors need to have a demat account and a broking/trading account with a registered stock broker.
Gold is considered to be a safeguard against inflation. The reason for this is that the factors that affect the price of gold are usually different from factors that impact prices of financial assets like stock markets and bonds. So in times when financial assets are in turmoil due to inflation or any other development, the price of gold will tend to move in the other direction and money flows into ‘safe’ assets like gold. In a portfolio, gold brings in much needed stability over the long-term.
The fund is mandated to invest between 90%-100% of assets in physical gold and remaining 10% in debt and money market instruments. However, the fund house has indicated that it will aim to be fully invested in gold under normal circumstances.
Instruments Allocation Range
Physical gold 90%-100%
Debt and money market instruments 0%-10%
Gold BeES will be managed passively in order to achieve its stated objective. In a passive management, the fund tries to mirror the performance of its benchmark index (in this case domestic gold price). To that end, Gold BeES will focus on tracking the performance of domestic gold and not outperforming it.
To know more about Gold BeES refer the following link.
Interesting. But can you tell me, is gold overvalued right now?