It is an open-ended gold Exchange Traded Fund, which invests in physical gold and endeavors to track the domestic spot price of gold as closely as possible. Thus it provides an option to invest in gold without taking physical delivery of gold. Each unit of Kotak Gold ETF is approximately equal to 1 gram of gold.
The Kotak Gold ETF advantage
Diversification: As an asset class, it gives you the benefits of diversification in your portfolio.
Liquidity: Since it trades like a share, buying and selling happens quickly and therefore it is highly liquid.
Safety: With Kotak Gold ETF you don’t have to worry about the risk of theft and quality of gold.
Security: All transactions happen in electronic mode, so there is no risk in case of unforeseen circumstances.
Lower Cost: The expenses incurred in buying and selling Kotak Gold ETF are much lower then the cost incurred in buying, selling, storing and insuring physical gold.
Comparison between options for investing in Gold
Benefits
Physical Gold
Commodity Exchange
Kotak Gold ETF
Good Control on quality of gold
No
Yes
Yes
Low cost of holding
No
High Brokerage Cost
Yes
No risk of theft
No
Yes
Yes
Available on small denominations
Yes
Yes
Yes
Don't have to pay wealth tax
No
Yes
Yes
Long term investment
Yes
Speculation or Trading
Yes
Long term capital gain tax
After 3 years
No
After 1 year
Invest in Kotak Gold ETF - Through Online Trading
Step 1: Open an online trading and demat account with a broker affiliated with National Stock Exchange (in case you don’t have an existing one)
Step 2: Lot on to the web site of an online trading portal (www.kotaksecurities.com) use your login ID & password to access your account.
Step 3: Place the buy order for the purchase of specified number of Kotak Gold ETF Units (NSE script code for Kotak Gold ETF is “KOTAKGOLD”)
Step 4: Web system debits your bank account (Fund transfer through linked savings account) and credits your demat account with the units on trade date + 2 day.
Similar process applies for sale transactions.
Risk Factors: Kotak Gold ETF is an open ended Gold Exchange Traded Fund. Investment Objective: To generate returns those are in line with the returns on investment in physical gold, subject to tracking errors. All investors including Authorized Participants (AP's), Large investors (LI's) and other investors may sell their units in the Stock Exchange(s)on which these units are listed on all the trading days of the Stock Exchange. Mutual Fund will repurchase units from AP's and LI's on any business day provided the value of units offered for repurchase is not less than creation units size.
General Risks: Mutual Fund investments are subject to market risks and there is no assurance or guarantee that the objectives of the schemes will be achieved. As with any securities investment, the NAV of the units issued under the schemes can go up or down depending on the factors and forces affecting the Capital and Money markets. Past performance of the Sponsor or AMC or Fund or that of existing schemes of the fund does not indicate the future performance of the scheme. Kotak Gold ETF is only the name of the scheme and does not in any manner indicate the quality of the scheme, its future prospects or returns. Statutory: Kotak Mahindra Mutual Fund has been established as a trust under the Indian Trusts Act 1882 by Kotak Mahindra Bank Limited (liability Rs NIL) with Kotak Mahindra Trustee Company Limited as the Trustee and with Kotak Mahindra Asset Management Co Ltd as the Investment Manager. Kotak Mahindra Bank Ltd is not liable or responsible for any loss or shortfall resulting from the operations of the scheme. Before investing, please read the Offer Document for full understanding of the scheme and detailed scheme specific risk factors.