Religare MF launches Religare Gold Exchange Trade Fund

Religare MF announced the launch of its new fund 'Religare Gold ETF' (An Open Ended 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. The fund will be managed passively with investments in physical gold and will endeavor to track the performance and yield of its underlying asset viz. gold.

Investments in physical gold will be made regardless of any investment merit. The fund intends to follow a fully invested approach and will have a minimum exposure of 90% of its assets in gold and gold bullion at all times. One unit of Religare Gold ETF will represent 1 gram of gold, the fund may buy and sell gold at different points of time during the trading session which may or may not correspond to the closing price of gold, maintain cash to meet its liquidity requirement, which may result in the Scheme having tracking error and to that extent the performance of the Scheme may not commensurate with the performance of its, underlying asset. However, the fund manager will try and minimize the tracking error to the fullest extent possible. The fund is benchmarked to the Price of Gold.

Speaking on the occasion, Saurabh Nanavati, Chief Executive Officer, Religare Mutual Fund said, "In keep asking whether this is the right time to invest in Gold. From, my perspective, Gold is a necessary allocation to everybody's portfolio to the tune of 5-10% of their portfolio. Gold is a hedge against inflation and a falling US dollar. Emerging markets like India are facing inflationary issues due to ample liquidity created by global central banks. As regards the US dollar, over a longer period with India and China GOP growth being in excess of 6% and US growth not expected to cross 2% in the near future, the dollar is bound to depreciate fairly sharply over the next 5 years against emerging market currencies. Gold will therefore, act as an insurance to retail investor portfolios."

"Religare Mutual Fund would like to thank its 200,000+ investors for the faith shown in us in 2009. Religare Mutual Fund's Assets under Management jumped almost 4 fold in calendar year 2009 to Rs. 15,800 crores. We intend to maintain our retail momentum. Our last 2 funds got in over 50,000 retail investors, and we hope that the Gold ETF will be well-received by investors and distributors. We are also focusing on aggressively increasing our broker empanelment which should increase from 13,000 empanelled distributors to over 22,000 in the next 2 months itself."

Source : Equity Bulls

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