UTI Mutual Fund has launched its Gold Exchange Traded fund at a time when many investors feel that stock valuations are stretched.
The UTI Gold Exchange Traded Fund is a passively managed, open-ended Exchange Traded Fund (ETF). But instead of tracking stocks or indices, this one will track the performance and yield of its underlying asset, gold.
The scheme will be invested in gold bullion and will reflect the international price of gold in the market.
The fund wants to offer investors a cost efficient and secure way to access the gold market without the necessity of taking physical delivery of gold. Every unit of UTI Gold ETF will approximately represent one gram of pure gold. Units allotted under the scheme will be credited to investors' demat accounts. Investors can buy and sell units of the scheme on the National Stock Exchange once the scheme is listed.
A minimum of 90 per cent and a maximum of 100 per cent of the investment in this fund will be in gold bullion. Money market instruments and other debt securities will range between 0 and 10 per cent.
Snapshot
NFO opens: March 1, 2007
NFO closes: March 12, 2007
Minimum investment amount during NFO: Rs 20,000
Listed on: National Stock Exchange (NSE)
Benchmark: Price of gold
Entry load: Varies depending on the amount invested*
Exit load: Nil
* 2.5% (
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