The auspicious occasion of Dhanteras symbolize happiness and prosperity. These occasions deserve celebrations that are truly golden. This Dhanteras invest in the SBI Gold Fund and add to your festivities, the glitter of good times to come.
SBI Gold Fund is an open ended fund of fund scheme, which will invest in units of SBI Gold Exchange Traded Scheme (SBI GETS). The scheme seeks to provide returns that closely correspond to the returns provided by SBI GETS. It gives you the benefit of getting an exposure to gold asset class in a convenient way, without having a Demat Account.
Why invest in gold?
Gold, the most precious metal of all, is also a popular form of investment. The savings come handy, for instance, during your daughter’s wedding. Investors can make the most out of its appreciating value potential without going through the hassles of physically possessing it, through Gold ETFs and Fund of Funds (FoFs). Better still, one may invest a small amount through SIP in Gold FoFs. So invest now and enjoy its growth potential.
Consistent asset class:
Gold as an investment asset has given positive returns (in USD) for each calendar year during the last decade outpacing most of asset classes.
Hedge against other asset class:
Gold, as an asset class has low correlation with other asset classes like equity and bonds. It has low correlation with economic downturn in volatile times and is a good hedge against inflation. Coupled with strong appreciation for over a decade, Gold has emerged as an important asset class for investments in one's portfolio.
Easy and convenient way to diversify one's portfolio.
Gold – A consistent performer
Gold has delivered consistent returns in various time horizons as shown in the graph below.
10 year returns of gold shows that it has performed relatively better than many asset classes.
SIP in Gold
SBI Gold Fund enables you to invest in gold through Systematic Investment Plan (SIP), thus inculcating a regular savings habit to your investments. This ensures that you can reap the benefits of investing in gold through a small but regular amount. The following table shows the SIP returns in Gold for the past 10 years. It is seen that Gold has displayed a consistency in performance.
|Period||1 Year||3 Years||5 Years||7 Years||10 Years|
|SIP Start Date||01/10/2011||01/10/2009||01/10/2007||01/10/2005||01/10/2002|
|Gold Price (Rs/Gm) (As on October 31, 2012)||2974.68||2974.68||2974.68||2974.68||2974.68|
|Total no. of units accumulated||21.06||83.50||177.44||315.49||629.45|
|Investment value (As on October 31, 2012) in Rs.||62654||248390||527835||938493||1872426|
|Returns on SIP in Gold (%)||8.29%||22.06%||22.77%||22.56%||21.54%|
Source: Bloomberg. Past Performance may or may not be sustained in future.
Source: Bloomberg. Returns are as on 31/10/2012 with SIP being done on 1st of every month. Returns are CAGR & have been calculated for cash flows at different point of time using XIRR function in excel spreadsheet for LBMA AM Fix closing prices converted into INR.Past performance may or may not be sustained in the future.
Introducing SBI Gold Fund
SBI Gold Fund is an open ended Fund of Fund (FOF) scheme that invests predominantly in the units of SBI Gold Exchange Traded Scheme (SBI GETS). The scheme seeks to provide returns that closely correspond to returns provided by SBI Gold Exchange Traded Scheme (SBI GETS). You can invest in SBI Gold Fund just like any other mutual fund scheme without the hassles of opening a demat account, providing you an opportunity to take exposure into Gold as an asset class, in a convenient way.
SBI Gold Fund Benefits
No need to hold or open a DEMAT account: SBI Gold fund provides an opportunity for the investor, to take exposure into Gold as an asset class, in smaller and convenient investment amount without having a demat account.
Systematic Investment Plan (SIP): It is a long term disciplined investment technique which provides a systematic way of investing in Gold. This allows you to save and invest regularly without 'timing the markets'.
Liquidity: An investor can subscribe and redeem gold fund on all business days.
Cost Effective: Investing in gold through the SBI Gold Fund in physical application mode enables you to invest in a low cost manner as the investor does not have to incur expenses like annual maintenance charges for demat account , delivery /brokerages charges or transaction charges incurred for investing through the dematerialized mode. However, investors will be bearing the recurring expenses of the scheme, in addition to the expenses of the underlying Scheme.>
Tax Benefits: SBI Gold Fund is treated as a non equity product from tax perspective. It enables an investor to claim long term capital gains tax after a period of one year of investments, whereas for physical gold long term taxation is available after 3 years.
Convenience of investing: Investing in gold through SBI Gold Fund is easy – investors can directly subscribe units through at the various designated investor service centre across the country thereby making it easily accessible and convenient.
Assured Purity & Security: SBI Gold Fund would invest in units of SBI Gold Exchange Trade Scheme (SBI GETS) and all gold bullion held in SBI GETS shall be of fineness of 995 parts per 1000 and it will be held safe with the custodian.
Availability of add on facility: The fund allows investors to avail add-on facilities like systematic transfer plan, systematic investment plan and systematic withdrawal plan.
Comparision of SBI Gold Fund with other gold instrument
The Scheme's performance will be benchmarked against the price of physical gold. As there are no indices catering to the gold sector or securities linked to the Gold, currently SBI Gold Fund shall be benchmarked against the domestic price of gold. The price here refers to the morning fixing of Gold by London Bullion Market association (LBMA).
Plans and Options
Growth and Dividend Plan (with both payout and reinvestment options)
Min. investment size initial purchase
Rs. 5000/- and in multiples of Re. 1 thereof & Additional purchase: Rs. 1000/- and in multiples of Re. 1 thereof
You can select any of the following facility to invest in SBI Gold Fund.
- Systematic Investment Plan (SIP): You can start investment in SBI Gold Fund with as low as
Rs.100/month minimum 60 months (shall be available only through the direct debit mode of SBI & associate banks)
Rs.500/month for minimum 12 months
Rs.1000/month minimum 6 months
Rs.500/quarter minimum 12 quarters
Rs.1500/quarter for minimum 4 quarters.
- Investing through the stock exchange platform
- Through SBIMF Online – investing online through SBI Mutual Fund website (www.sbimf.com)
Note: The investor will be bearing the recurring expenses of the Scheme, in addition to the expenses of underlying scheme.