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Industry lauds gold-backed ETFs AP Kurien, chairman, Association of Mutual Funds in India (AMFI) stated, “This is the first step to allow mutual funds to venture into commodity-backed products and this will see mutual fund launching such schemes once Sebi and RBI work out the norms.”
The finance minister P Chidambaram in his budget speech stated that Sebi in consultation with RBI will be asked to permit mutual funds to introduce Gold Exchange Traded Funds (GETFs) with gold as the underlying asset, to enable any household to buy and sell gold in units for as little as Rs 100.
Sanjeev Shah executive director, Benchmark AMC, the first mutual fund in India to propose such a scheme (May 2002) said, “Finally our dream will come true.” Allowing gold-linked ETF is a step forward. Such products can allow access for Indian investors an additional asset class in the most convenient form. Internationally such ETFs have received tremendous successes. We had already mooted such products and looking forward to take this idea forward,” Rajan Mehta, Executive Director, Benchmark AMC having four ETFs in its kitty said. Some mutual funds remained non-expressive on the permission for gold-backed ETFs. “Details of gold MFs need to be understood before any comments can be made. It has to be identified whether normal mutual fund schemes backed by gold can be floated ,” Sandeep Dasgupta, CEO, Deutsche AMC said. Deutche AMC has no ETF.
“The entire Rs 6,000 crore worth of gold is purchased through the informal channels. By offering gold-backed investment products like the GETF, the Indian investor can save in gold, in a more cost-effective and convenient way through the Banks and Mutual fund sector,” Sanjeev Agarwal, MD, Indian sub continent, World Gold Council stated. | ||
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