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IDBI Gold Schemes

Gold is no doubt the best form of physical asset that every Indian prefers to have. Apart from holding gold in its physical form, do you know that investors can now obtain attractive returns without actually possessing physical gold? Read more to find out!

IDBI Gold Exchange Traded Fund (ETFs)

An ETF is an open ended investment scheme which is traded on the stock market like shares and equity instruments. The IDBI Gold Exchange Traded Fund is an ETF which allows investors to take benefits of gold investments without the requirement of buying gold. The fund’s investment objective is to replicate the performance of gold with respect to domestic prices via passive investment strategy by minimising the tracking errors between the underlying asset and the underlying fund.

Features of IDBI Gold Exchange Traded Fund

  • It is an open ended scheme which trades in gold exchange.
  • The investment is in the form of physical gold, debt instruments and money market securities.
  • In case of a New Fund Offering (NFO), the minimum application investment amount is ₹10000 and thereof in multiples of ₹1. Also, the allotment price is based on the price of 1 gram of gold.
  • The price of the NFO at ₹100 for cash at a premium per se is equal to the difference of the allotment price from the face value.
  • The risk involved in a gold exchange traded fund is moderately high and the overall investment attracts long term capital gains tax.

Benefits

of IDBI Gold Exchange Traded Fund

  • An ETF is traded via a demat account and kept in a dematerialized for, thereby reducing the risk associated with holding gold in the physical form.
  • The custodian holds the gold
  • The units of IDBI Gold Exchange Traded Fund are backed up by 24 karat gold of 99.5% purity.
  • One of the best advantages of an ETF is that the investment can be easily sold or bought on the stock market at real time prices and on market hours.
  • The expense ratio and brokerage charges for ETFs is much lower in comparison to purchasing physical gold.
  • The ETFs helps in minimising the tax liability

IDBI Gold Fund

Similar to the IDBI Gold Exchange Traded Fund, investors can purchase the units via systematic investment plans. The returns are based on the performance of the IDBI Gold Exchange Traded Fund, IDBI Liquid Fund Scheme of IDBI Mutual Fund, Reverse Repo, Short-Term Fixed Deposits and securities of the Money Market.

Features of IDBI Gold Fund

  • The investment objective of this fund is to generate returns which correspond to the IDBI Gold Exchange Traded Fund Returns.
  • The face value of IDBI Gold Fund is set at ₹10 per unit for cash at par. The minimum investment amount is ₹5000 and then it can be made in multiples of ₹1. The face value is 10 per unit for cash at par.
  • You have an option to make an additional investment of ₹1000 minimum and then in multiples of ₹1.
  • The risk profile is moderately high.
  • Taxes, depending on the investment horizon is applicable.

Benefits of IDBI Gold Fund

  • You can invest in gold without holding the physical asset.
  • It is an open ended scheme with a regular and direct purchase plan.
  • Monthly SIP - Rs.500 per month for 12 months or Rs. 1000 per month for 6 months.
  • Quarterly SIP - Rs.1500 per quarter for at least 4 quarters, then in multiples of Rs.1.

FAQs on IDBI Gold Schemes

What is a gold ETF?

A gold based exchange traded fund are funds which trade on the stock market but are based on the fluctuating price of gold. The principal asset allocated is gold.

Which gold schemes does IDBI offer?

IDBI offers two types of exchange traded funds under its gold scheme - IDBI Gold Fund and IDBI Gold Exchange Traded Fund.

Can I invest via SIP in IDBI Gold Fund?

Yes, you have an option to invest via SIP on a monthly and quarterly basis starting with a minimum amount of ₹500.

How much can I invest on a quarterly basis under the IDBI Gold Fund?

You can invest up to Rs.1500 per quarter for at least 4 quarters, then in multiples of Rs.1 via systematic investment plan.

What is IDBI Gold Exchange Traded Fund?

The IDBI Gold Exchange Traded Fund is an ETF which allows investors to take benefits of gold investments without the requirement of buying gold. An ETF is an open ended investment scheme which is traded on the stock market like shares and equity instruments.

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