Gold ETFs -A Smart Way to invest in GOLD

Why should you invest in Gold ?

An Excellent Diversification for your Portfolio

Hedge against Inflation, Event Risk Globally renowned Asset Class Intrinsic value

Performance of GOLD

Average return turned –ve only twice in last 15 years.

An Excellent Diversification for Portfolio.

Average retuns of Gold in last 15 yrs

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%19

98

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

% Returns

Investment options in Gold Physical Gold (Gold Coin, Bar)/ Jewelry

Commodity exchange

Gold ETFs

What is Gold ETF? Gold ETFs are exchange traded funds,which facilitates

investor to participate in the gold market without the necessity of taking physical delivery of gold. In simple words, the investment in Gold ETF is in demat form.

Gold ETFs are designed to provide returns in line with returns provided by physical Gold. The NAV of one unit closely corresponds to the spot price of 1 gram of gold after accounting for expenses. Each unit is approximately equal to the price of 1 gram of Gold.

Advantages of Gold ETF Potentially cheaper investment option compared to

other forms of gold investment. Quick and Convenient dealing through Demat Account. No Storage Costs & Security Issues for investors. Transparent Pricing. Tax efficient-Mutual Fund Taxation, No Wealth-Tax. Listed and traded just like a stock. Flexibility to buy in small lots (minimum one unit=1

gram of gold*).*In case of some Gold ETFs one unit equals half gram of gold.

Comparison of Gold ETF vs Gold Bars vs Jewellery

Overall Gold ETFs outscore other Avenues on the above parameters

Transaction Charges Jewellery Gold Bars Gold ETF

Purchase Making charges of 15- 20%

10% to 20% mark up charges by banks.

Brokerage of 0.5% or even less

Sell 10% – 20% is lost due to Purity issues

Banks do not take it back , so premium

paid at time of purchase is written

off.

Brokerage of 0.5% or even less

Maintenance

Insurance charges and locker charges

(if you put it in locker)

Insurance charges and locker charges

(if you put it in locker)

1.00%

Tax Implications

Long term capital gain, but after 3

years. plus wealth tax

Long term capital gain, but after 3

years. plus wealth tax

Long term Capital tax of, but after 1

year. No wealth tax

You pay more overhead charges while investing in Gold Bars and Jewellery

NAV’s of Gold ETFs at par with Gold prices

Comparison of Kotak Gold ETF & Spot Gold price

0500100015002000250030003500

Mar-08

Sep-08

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mon

thly

Gol

d Pr

ice

Gold PricesKotak ETF

Multiple trading platforms to invest in Gold ETFs

Log on to trading a/c

Click on Buy / Sell Enter name of the Gold ETF, Units & Pricewww.hdfcsec.com

How to invest in Gold ETFs through us?

Log on to trading a/c

Click on Buy / Sell Enter name of the Gold ETF, Units & Price

Place Order

Or

Call our branch Authenticate yourself Place Order

You can invest in Gold ETFs just like any equity scrips.Note – Demat account is mandatory to invest in Gold ETFs.

Investment Style to be adopted :

• Investing in Gold with Lump sum amount.

• Investing in Systematic Investment Plan way

Power of SIP in Gold

If you Invest in 1 Unit of Kotak Gold ETF every month from March 2008, you would earn approx 19.78% return on your investment.

Power of SIP in Gold ETF

0200400600800

100012001400160018002000

Mar

-08

Jul-0

8

Nov

-08

Mar

-09

Jul-0

9

Nov

-09

Mar

-10

Jul-1

0

Nov

-10

Mar

-11

Jul-1

1

Nov

-11

Mar

-12

Jul-1

2

Nov

-12

Hun

dred

s

Cost of InvestmentValue of Investment

What is DIYSIP ?

DIYSIP stands for : Do It Yourself Systematic Investment Plan.

It is a product through which, you can invest in stocks, Gold ETFs & Index ETFs in a disciplined manner.

It helps you use market volatility to your advantage & build your own portfolio over a period of time.

Benefits of Investing in DIYSIP way…• Power of Compounding Effect

It refers to process of earning returns on reinvestment of assets, which have already generated returns. This means the asset will be generating returns on an asset’s reinvested earnings.

• Rupee cost AveragingTime in the market is better than timing the market

• Convenience and Light on pocketYou can start investing in one unit of Gold ETFs every month

How to start your DIYSIP online Logon to your trading account Visit

www.hdfcsec.com

Click on DIYSIP

Select Online registration

Enter the Name of the Gold ETF

Enter the No. of units

Authenticate using your Login id & Password

Confirm

For any further queries, visit our website www.hdfcsec.com or call our

customer care @39019400

Thank you