Mutual Funds
Kotak Gold Fund, a me-too product

After Reliance launched its innovative gold savings fund, Kotak has launched an identical product

The Kotak Gold Fund launch comes within days of the launch of Reliance Gold Savings Fund, the first gold fund-of-funds in the industry. (Reliance Gold Savings Fund has a strange target group).
 
Similar to Reliance Gold Savings Fund, this is another fund-of-fund kind of scheme and investors must understand this offer very clearly. It's a gold ETF (exchange traded fund) based fund-of-fund scheme which will invest only in Kotak gold ETFs. The New Fund Offer (NFO) opens on 4th March and closes on 18th March.

Apart from being able to invest without a demat account, these funds help retail investors invest smaller sums. Reliance had a minimum investment limit of Rs100 per month in its gold savings fund. Kotak allows investors to start their investment with Rs1,000 per month through an SIP (systematic investment plan) route. This genre of gold funds generally bears an expense ratio of 1.5%.

Returns from gold exchange traded funds feeder funds do not attract wealth tax, as is the case with physical gold transactions. Not to be left behind, even stockbrokers have begun launching gold fund-of-funds using their portfolio management scheme licences.

Destimoney Securities has launched a structured gold reserve fund, which aims to protect investors from gold price fluctuations.

At a time when gold is making new highs, asset managers and brokers are queuing up to launch gold saving schemes which will enable retail investors to park their money in gold ETFs without demat accounts and through SIPs. Reliance tried to reach a common class of people who did not have demat accounts and were interested in investing in gold. It targeted the medium class which resembles a majority of the population. Obviously the other fund houses cannot lag behind. So Kotak MF started the rally and there will be many more to join.

As pointed out by Moneylife in an article dated 18 February 2011, "The price of gold has gone up six times in the last 10 years. Any asset that has gone up so much for so long a time carries a huge risk of a crash. How will a risk-averse investor react to an asset that can crash suddenly?"

Fund companies and intermediaries don't usually point out these kinds of risks in their offer documents.

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COMMENTS

Sundaram

6 years ago

Kotak's is a copy-cat version of Reliance Gold FoF. I understand that Quantum has applied to SEBI for approval of such a product and in case they charge a lesser expense ratio than 1.5%, it may make sense to go with them (that is,if one wishes to invest in such a product)

All-India Bar exam goes ahead despite challenge in court; activists expect backlash

In Chennai, exam postponed following agitation; regional bar councils object to exam saying that it puts graduates from rural, impoverished background at a disadvantage

The All India Bar Examination (AIBE) was held on Sunday at about 45 centres across the country, despite a pending petition before the Supreme Court on the legitimacy of the exam.

The Bar Council of India (BCI) described the conduct of the exam as a success, but legal activists believe there could be a backlash from the nearly 22,000 law graduates who took the exam, if the court decides that it is null and void.

Meanwhile, in Chennai the exam was postponed to 27th March following an agitation that had built up over the past few days. Several regional bar councils have objected to the exam, saying it was unnecessary and that it would put students particularly from a rural, impoverished background at a disadvantage.

"We urged the court to resolve the issue before the exam, or postpone the exam till a conclusion is reached," legal activist Prakhar Sharma said. "But the BCI went ahead and held the exam anyway. Serious legal complications may follow."

Nearly 22,000 law graduates who appeared for the exam have paid the requisite fees and this money will also become an issue, Mr Sharma said. "Students may demand a compensation. They are unemployed until they pass the exams and they were preparing for it for six months, even after their five-year course. Of course it is a loss," Mr Sharma said.

Before the examination, students were asked to sign an undertaking that they would take and pass the exam in order to be eligible to practice as advocates. If the court decides to rule against the authority of the BCI to make the exam compulsory, the students who have signed the undertakings would all be party to an illegal measure.

About the postponement forced in Chennai, Mr Sharma said, "The regional councils have the power to make rules, and the BCI only gives its assent to it. So it is unlikely that the state bar councils will take this lightly."

RTI activist Babubhai Vaghela said, "The BCI's council before the court said that they are authorised to amend the Advocates Act 1961, this is a false claim. They must go to Parliament for an amendment because that is the job of the legislature."

User

COMMENTS

sankar

6 years ago

How sad to note that BCI claiming to the authority for amendment in the ACT? Our legislatures are making the law and also if any amendment is required, has to be amended in parliament>BCI wants to earn money and showing itself.

Government notifies United Stock Exchange as recognised stock exchange

The government has notified United Stock Exchange, as a “Recognised Stock Exchange”, where trading would not be deemed as speculative transactions

The government has notified United Stock Exchange (USE), as a "Recognised Stock Exchange", where trading would not be deemed as speculative transactions. As per the relevant clause of the notification, trading in derivates are not speculative transactions. However for the purpose of claiming it to be non-speculative the derivates should be traded on a recognized stock exchange only.

The Income-Tax Department said in a notification dated 22 February 2011, "The Central Government hereby notifies United Stock Exchange of India Ltd as a recognized stock exchange with effect from the date of publication of this notification in the official gazette," A notification from the Central Government further mentioned, "This notification shall remain in force until the approval granted by the Securities and Exchange Board of India (SEBI) is withdrawn or expires, or this notification is rescinded by the Central government."

"The Central government can withdraw the recognition granted to United Stock Exchange of India Ltd if any of the conditions specified in relevant Income-tax Rules, subject to which the recognition is granted, is violated," The notification said further.

USE launched with currency derivatives on 20 September 2010 and introduced Currency Options with effect from 29 October 2010.

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