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Birla Sun Life Mutual Fund
Copyright Aditya Birla Nuvo Limited 2008
What is Birla Gold ETF
 Birla Sun Life Gold ETF (BSL GETF) is an Open ended Gold
Exchange Traded Fund. The Fund would invest in
 physical gold of prescribed quantity and quality (fineness).
 The investment objective of the Scheme is to generate returns
that are in line with the performance of gold, subject to tracking
errors.
 Exchange Traded Funds (popularly known as ETF) are schemes
whose units are listed on the Stock Exchange and can be bought
or sold at a price, which may be close to the NAV of the scheme.
 ETF tracks an index, a commodity or a basket of assets like an
index fund, but trades like a stock on an exchange.
Copyright Aditya Birla Nuvo Limited 2008
Where the Scheme will Invest
Copyright Aditya Birla Nuvo Limited 2008
Why Should I Invest in Gold
 It is not correlated with other asset classes because gold
price is not necessarily driven by the same factors that
drive the performance of other asset classes.
 Gold has been called a "barometer of fear." When
people are anxious about the economy - they turn to
gold and bid the price up. The two main things that make
people anxious are deflation and inflation.
 Gold is an inflation hedge as proved by a 400-year study
of the purchasing power of gold in Britain between 1596
and 1997. One ounce of gold would consistently
purchase the same amount of goods and services as it
would have done 400 years ago.
Copyright Aditya Birla Nuvo Limited 2008
Why Should I Invest in Gold
 Gold has significantly low correlation to other assets like
equity indices, fixed income and commodities. Therefore
adding gold to a portfolio may help improve risk adjusted
returns or reduce volatility for the expected return.
 High Domestic Demand:
 India is the largest gold market in the world. In terms of
jewellery consumption, investment and industrial demand, it
accounted for ~32% of total global demand for gold in 2010.
Copyright Aditya Birla Nuvo Limited 2008
Copyright Aditya Birla Nuvo Limited 2008
Why Should I Invest in Gold
 Rising demand in other Emerging Markets: Gold
purchases in China, the world’s largest producer, climbed to
200 metric tons in the first two months of 2011 as faster
inflation boosted consumer demand.
 China’s investment demand in 2010 jumped 70 percent to
179.9 tons, surpassing Germany and the U.S., as buyers
sought out bars and coins. The boom in gold demand in China
is also driven by concern about inflation pressure and the
poor performance of alternative investments.
 India & China collectively account for 52% of the global
demand for Gold in 2010 (Source: WGC, Bloomberg).
Copyright Aditya Birla Nuvo Limited 2008
Why Should I Invest in Gold
 Hedge against a weak US Dollar:
 While the returns of gold are lowly correlated to global stocks
and bonds, it has an inverse relationship with the dollar.
 With the U.S. dollar plummeting 8-12% since June, 2010
against major global currencies and the Federal Reserve
buying $600 billion in U.S. treasuries in its second round of
quantitative easing, more individuals are turning to gold and
silver to protect themselves from increasing inflation, the
continued devaluation of the dollar, and a future which is
difficult to predict.
 (As on 31 Mar 2011. Source: www.commodityonline.com, Google Finance)
Copyright Aditya Birla Nuvo Limited 2008
Why Should I Invest in Gold
 Safe Haven Status and Store of Value: Gold is not tied
to any particular country or financial system, possibly
providing stability in periods of economic uncertainty.
Tensions in the Middle East and North Africa are high, and
there is a great amount of uncertainty as to what will happen
next.
 Investors have always flocked to gold as a safe haven and
hedge in times of uncertainty and crises – bank failures, low
and declining interest rates, war, economic crises, etc.
 Gold prices could go higher in case of continuing political
unrest in Libya and other areas in the Middle East and North
Africa.
Copyright Aditya Birla Nuvo Limited 2008
Why Should I Invest in Gold
 Limited Annual Supply Growth:
 Despite rising gold prices over the last several years, mine
supply has not increased. New mines are typically located in
more difficult locations, limiting the ability to grow supply
quickly.
 The price of gold tracks the shifting balance of supply and
demand. Long lead times in gold mining mean production of
gold is relatively inelastic, regardless of increases in demand.
 That’s why the rally in the gold price since 2001 has not
engendered a meaningful increase in gold production levels.
Copyright Aditya Birla Nuvo Limited 2008
Importance of Owning Gold
 The correct way to think about owning gold is as
insurance.
 Unlike shares of a company or government bonds - gold
will always retain value. Gold's most important use is
insurance against the paper (fiat) currency of the country
you live in.
 Almost every country has had at least one major
"currency crisis" over the last one hundred years. Those
that had some of their wealth in gold survived.
 So, think of gold as insurance. Do not think of gold as a
way to "make money." Do not try and "time the market."
Copyright Aditya Birla Nuvo Limited 2008
Why not Gold Coins/Bars/Jewellery
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Gold Price Change
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Gold-Performance
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Gold Price-5 Year
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Gold Price-10Year
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Gold Price-15Year
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Gold ETF-Turnover
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Gold ETFs-Turnover
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Gold ETF-Turnover
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Calculation
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Copyright Aditya Birla Nuvo Limited 2008
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