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Monday, June 01, 2009

Religare Gold Exchange Traded Fund seeks Sebi's approval

Investment exposure will be in physical gold

Religare Mutual Fund has filed offer document with Securities and Exchange Board of India (Sebi) to launch new fund named as Religare Gold Exchange Traded Fund, an open-ended gold exchange traded fund. Each unit will have a face value of Rs.100 each and each unit is approximately equal to price of 1 gram of gold.

Details of the Religare Gold Exchange Traded Fund:

The scheme seeks to generate returns that closely correspond to the returns provided by investment in physical gold in the domestic market, subject to tracking error.

Minimum application amount: For retail investors, the minimum application amount will be Rs 5000 and in multiple of Re 1 thereafter. For authorized participants and large investors, the minimum application amount will be Rs 15 lakh and in multiple of Re 1 thereafter or 1 kilogram gold per application and in multiples of 1 kilogram gold thereafter. The gold should be of finesses of 995 parts per 1000, i.e. 99.5%.

The scheme seeks to collect a minimum corpus of Rs 1 crore during NFO period.

Asset allocation: The scheme will invest 90-100% in physical gold with medium risk profile. The fund will be having investment exposure up to 10% in debt and money market instruments with low to medium risk profile. Investments in securitized debts can be made by the scheme up to 10% of the net assets. The scheme may invest in warehouse receipts and other instrument having gold as underlying and units of international gold linked ETF, as and when permitted by Sebi.

Load structure during NFO period: The scheme will charge an entry load of 1.50% in respect of each purchase/ switch in of units less than Rs 15 lakh in value. In respect of each of each purchase/ switch in of units greater than Rs 15 lakh and less than Rs 50 lakh in value, 1.00% entry load is payable. In respect of each purchase/switch-in of units equal to or greater than Rs. 50 lakh and less than Rs. 1 crore in value, an entry load of 0.50% is payable while in respect of each purchase/switch-in of units equal to or greater than Rs. 1 crore in value, no entry load is levied.

However, the fund will not levy exit load.

Load structure during on going period: The Fund will not ask both entry and exit load.

Benchmark index: The performance of the scheme is being benchmarked to price of gold.

Fund manager: Gautam Kaul is the fund manager for the scheme.

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