HDFC Gold Exchange Traded Fund
The investment objective of the Scheme is to generate returns that are in line with the performance of gold, subject to tracking errors.
Basic Scheme Information
|Nature of Scheme
||An open ended Exchange Traded Fund|
||Currently, there are no investment Plans / Options being offered under the Scheme. However, the Trustee reserve the right to introduce investment Plans / Options under the Scheme at a future date in accordance with SEBI (MF) Regulations.|
(as a % of the Applicable NAV)
|Not Applicable. |
Pursuant to SEBI circular no. SEBI/IMD/CIR No.4/ 168230/09 dated June 30, 2009, no entry load will be charged by the Scheme to the investor. Upfront commission shall be paid directly by the investor to the ARN Holder (AMFI registered Distributor) based on the investors’ assessment of various factors including the service rendered by the ARN Holder.
(as a % of the Applicable NAV)
|For Creation Unit Size:
- No Exit load will be levied on redemptions made by Authorised Participants / Large Investors directly with the Fund in Creation Unit Size.
For other than Creation Unit Size:
The Units of HGETF in other than Creation Unit Size cannot be directly redeemed with the Fund. These Units can be redeemed (sold) on a continuous basis on the NSE and BSE during the trading hours on all trading days.
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|Minimum Application Amount
||Authorised Participants: Application for subscription of HGETF Units directly with the Fund in Creation Unit Size at NAV based prices in exchange of Portfolio Deposit and Cash Component.|
Large Investors: Application for subscription of HGETF Units directly with the Fund in Creation Unit Size at NAV based prices by payment of requisite Cash as determined by the AMC only by means of payment instruction of Real Time Gross Settlement (RTGS)/National Electronic Funds Transfer (NEFT) or Funds Transfer Letter/ Transfer Cheque of a bank where the Scheme has a collection account.
Other investors (including Authorised Participants and Large Investors): Units of HGETF can be subscribed (in lots of 1 Unit) during the trading hours on all trading days on the NSE and BSE on which the Units are listed.
|Net Asset Value Periodicity
||Every Business Day.|
||Within 10 working days. |
(As per present Laws)
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|Current Expense Ratio (#)
(Effective Date 13th August 2010)
|(#) Any change in the expense ratio will be updated within two working days.|
|Growth||18 Sep 2014||2538.2080|
The table below provides the broad asset allocation of the portfolio of Scheme to be followed under normal circumstances.
|Type of Asset / Instruments
||Indicative allocations Instruments (% of total assets)
||Medium to High|
|Debt Securities and Money Market Instruments #
* Investments in gold related instruments (including derivatives) will be made as and when SEBI permits mutual funds to invest in gold related instruments.
# Investment in securitised debt shall not normally exceed 10% of the net assets of the Scheme.
The investment objective of the Scheme is to generate returns that are in line with the performance of gold, subject to tracking errors. The Scheme would invest in gold in the domestic market and intends to track the spot price of gold in the domestic market. The Scheme also may engage in gold lending, and /or deposit gold with banks in return for fees as and when permitted by SEBI. The Scheme will also invest in debt and money market securities in order to meet the liquidity requirements.
Though every endeavor will be made to achieve the objectives of the Scheme, the AMC/Sponsors/Trustees do not guarantee that the investment objectives of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme.
Investments made from the net assets of the Scheme would be in accordance with the investment objective of the Scheme and the provisions of the SEBI (MF) Regulations. The AMC will strive to achieve the investment objective by way of a judicious portfolio mix comprising of Gold bullion and instruments related to gold (including derivatives as and when permitted by SEBI), Debt Securities and Money Market Instruments. Investments in gold bullion would be primarily assessed with regard to its fineness. Every investment opportunity in Debt Securities and Money Market Instruments would be assessed with regard to credit risk, interest rate risk and liquidity risk.
A detailed credit evaluation of each investment opportunity will be undertaken. The AMC will utilise Ratings of recognized rating agencies as an input in the decision making process. Investments in Debt Securities and Money Market Instruments will usually be in instruments that have been assigned high investment grade ratings by a recognised rating agency. In line with SEBI Circular No. MFD/CIR/9/120/ 2000 dated November 24, 2000, the AMC may constitute committee(s) to approve proposals for investments in unrated instruments. The AMC Board and the Trustee shall approve the detailed parameters for such investments. The details of such investments would be communicated by the AMC to the Trustee in their periodical reports. It would also be clearly mentioned in the reports, how the parameters have been complied with. However, in case any security does not fall under the parameters, the prior approval of Board of AMC and Trustee shall be sought.
Interest Rate Risk
An interest rate scenario analysis would be performed on an on-going basis, considering the impact of the developments on the macro-economic front and the demand and supply of funds. Based on the above analysis, the AMC would manage the investments of the Scheme on a dynamic basis to exploit emerging opportunities in the investment universe and manage risks at all points in time.
The AMC will attempt to reduce liquidity risk by investing in securities that would result in a staggered maturity profile of the portfolio, investment in structured securities that provide easy liquidity and securities that have reasonable secondary market activity. In the event of a requirement to liquidate all or a substantial part of these investments in a very short duration of time, the AMC may not be able to realize the full value of these securities to an adverse impact on the Net Asset Value of the Scheme.
Tracking error means the variance between daily returns of the underlying benchmark (gold in this case) and the NAV of the Scheme for any given period. NAV of the Scheme is dependant on valuation of gold. Gold has to be valued based on the formula prescribed by SEBI. NAV so computed may vary from the price of Gold in the domestic market. Tracking error could be the result of a variety of factors including but not limited to:
- Delay in the purchase or sale of gold due to
- Illiquidity of gold,
- Delay in realisation of sale proceeds,
- Creating a lot size to buy the required amount of gold
- The Scheme may buy or sell the gold at different points of time during the trading session at the then prevailing prices which may not correspond to its closing prices.
- The potential for trades to fail, which may result in the Scheme not having acquired gold at a price necessary to track the benchmark price.
- The holding of a cash position and accrued income prior to distribution of income and payment of accrued expenses.
- Disinvestments to meet redemptions, recurring expenses, dividend payouts etc.
- Execution of large buy / sell orders
- Transaction cost (including taxes and insurance premium) and recurring expenses
- Realisation of Unit holders’ funds
Tracking error due to movement in prices of physical gold will impact the performance of HGETF. However, the Scheme will endeavor to keep tracking error as low as possible by:
- Use of gold related derivative instruments, as and when allowed by SEBI (MF) Regulations
- Rebalancing of the portfolio.
- Setting off of incremental subscriptions against redemptions.
Disclaimer of NSE/BSE:
It is to be distinctly understood that the permission given by NSE/ BSE should not in any way be deemed or construed that the SID has been cleared or approved by NSE/ BSE nor does it certify the correctness or completeness of any of the contents of the Draft Scheme Information Document/ SID. The investors are advised to refer to the SID for the full text of the Disclaimer clause of NSE/ BSE.
Mr. Anil Bamboli.
Portfolios - Holdings
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