New Delhi: Riding high on growing demand for gold investment, the country’s top bourse NSE saw the turnover more than doubling for gold ETFs in last fiscal, which allow investors to buy and sell the yellow metal in electronic form.
Their total traded value of gold ETFs (Exchange Traded Funds) on NSE surged to Rs 4,074.30 crore in fiscal year 2010-11 ended 31 March, as against Rs 1842.36 crore in the previous year.
Gold ETFs, where returns are linked to the domestic price of physical gold but spare the investors from the trouble of buying and keeping the yellow metal in physical form, have been gaining ground among investors in past few years.
Their total traded value on NSE for 2006-07 stood at Rs 13.95 crore, which grew to Rs 478.8 crore in 2007-08 and then to Rs 1172.30 crore in the fiscal 2008-09.
There was only one asset management company offering gold ETF in 2007, as against about 10 currently.
Anticipating a robust growth potential for gold as an investment, NSE has now also launched a dedicated website to spread investor awareness about sale and purchase of the yellow metal in electronic form.
NSE plans to provide the initial gateway through this website, nsegold.com, for sale and purchase of Gold ETFs (Exchange Traded Funds), which allow trade in the yellow metal in non-physical mode and like stocks or any other security.
There are 10 asset management companies or mutual fund houses with gold ETF products listed on NSE.
The website, which has been launched as an investor awareness initiative by NSE, will allow the investors to check the latest price of these products and also submit their interest in buying gold ETFs.
The returns on gold ETFs are linked to the domestic price of real gold and each gold ETF unit is roughly equal to the price of 1 gm of gold.
The gold ETFs’ Asset Under Management — the value of existing investments in these investment schemes — stood at Rs 4,400 crore as on March 2011, marking a whopping increase of 176% since March 2010.