Comments on: Gold ETF in India

By: manish verma

manish verma — Sat, 04 Feb 2012 12:59:33 +0000

hey,, can you please provide me the evolution on gold etf in india, procedure of investing, performance…

By: Mahendra

Mahendra — Fri, 18 Nov 2011 16:56:40 +0000

Pl. send me how can I invest in gold etf. What is the prosedure for it

By: Manshu

Manshu — Sun, 30 Oct 2011 17:09:58 +0000

Hi Chandrachur – I usually go directly to the NSE website and pull the data I need from there, so you may try doing that as well.

By: Chandrachur

Chandrachur — Sat, 29 Oct 2011 11:16:11 +0000

Hi Manshu,
Can you recommend a site/s which can be used to compare performance of GETFs? MC was something which did not impress me much, atleast on GETF comparisons.
Thanks and Regards,
Chandrachur

By: Manshu

Manshu — Mon, 24 Oct 2011 23:38:55 +0000

You can look at gold price movement at goldprice.org or even better is it to periodically see how three or four ETFs have moved. They may have different movements on a day or two, but over a month or so the return should smooth out and be very close to each other.

By: Mandar

Mandar — Sat, 22 Oct 2011 17:11:13 +0000

Manshu,

Thanks for sharing your knowledge – it has helped me get a very good understanding of gold ETFs.

Perhaps a basic question – is there an ‘authoritative’ site to track the underlying gold prices used to calculate the NAVs for gold ETFs?

By: Manshu

Manshu — Fri, 14 Oct 2011 15:04:31 +0000

Hi Sat Prakash – that’s a good question, and what happens is that the price of the ETF gets re-adjusted to the value of the gold it holds periodically, so while initially a unit of ETF is supposed to reflect a gram of gold that’s more of an indicative thing, and if you buy any gold ETF that has been there for a little while – this relationship will not hold true at all.

The expenses that a fund incurs will be deducted from the returns it makes, and that consequently reduces the gold that one unit represents. Higher the expense – worse this situation will be and this is true for all type of mutual funds or ETFs.

Now the funds will earn some money from whatever liquid investments they have and also the gains made by the underlying asset, so the relationship between number of years and percentage gold may not be linear.

So if you buy something today and hold it for 10 years – the returns will be reduced to the extent of the expenses and for that reason you should always look for a lower cost – however it may not always be the case that this relationship is clearly visible in the fund.

Does that make sense?

By: Sat parkash

Sat parkash — Thu, 13 Oct 2011 08:10:14 +0000

Hi Manshu,

Somewhere in these posts i read that one unit of ETF’s actual value keeps of diminishing because of Expanse ratio of something as holding period increases.
lets say i bought a unit now and on 1% expanse ratio my unit after an year will hold .99 unit of Gold and on similar lines, my one unit of ETF will hold .75 unit of gold after 25 years.

please dont mind if i have got it all wrong.

By: Manshu

Manshu — Sun, 18 Sep 2011 17:10:27 +0000

I don’t know why it isn’t in Moneycontrol and couldn’t care less if it is there or not. It makes no difference at all to me whether a particular fund is listed in their system or not. I have seen and analyzed the price data directly from the NSE website many times, and you can see the results on some of the posts here too.

Why is it a concern to you if something is present in the MC system or not?

By: Anky

Anky — Sat, 17 Sep 2011 06:54:44 +0000

Hi Manshu,
After reading everything I found GS Gold Bees is best to purchase but why I am not getting any return info about this fund on money control:
http://www.moneycontrol.com/mf/gainerloser/snapshot.php?op1=ab&option=gold&sort=im_asstsize

Which scares me.
Please check and answer. Waiting for ur reply.