The Hindu Business Line : `Gold fund cost-effective saving'

MUMBAI: By offering gold-backed investment products like the Gold Exchange Traded Fund (GETF), investors will get the opportunity of saving in gold in a more cost-effective and convenient way through the banks and mutual fund sector, according to Mr Sanjeev Agarwal, Managing Director, Indian sub-continent, World Gold Council.

Commenting on the Finance Minister's announcement to permit the fund, he said: "About Rs 6,000 crore of Indian household savings is invested in physical gold bars and coins every year, in addition to the gold jewellery purchase. At present, the entire Rs 6,000-crore worth of gold is purchased through the informal channels."

A gold ETF is an exchange-traded fund where the shares or units are invested in gold bullion.

By investing in this, an investor can purchase any amount of gold ranging from a single gram to a couple of kg, where the cost of purchase would be less than half of that he currently incurs on physical gold, Mr Agarwal said.

At present, an investor would be paying between 3 per cent and 6 per cent over and above the price to cover inventory carrying and other costs related to the purchase of physical gold.In addition, he has to incur insurance cost and locker charges for storage. There are also various risks attached to holding physical gold.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Delay in procurement of paddy — Achuthanandan to launch indefinite fast next week

Govt slaps safeguard duty on tapioca starch

Canara Bank to expand commodities exposure

Pala Marketing Society to expand block rubber capacity

Rubber prices rally on short-covering

Tea industry may save on levy cut

Upasi plea to do away with division of lots in e-auction

`Gold fund cost-effective saving'

Low cotton prices spur consumption

Vegoil market awaiting clear direction

Cashew exports may top Rs 2,500 crore

Prices of agri commodities in AP well above MSP