It is expensive and aimed at risk-averse investors, but would they know the risks inherent in buying gold as investment?
Reliance Gold Savings Fund opens up a new avenue for investing in gold. The Fund seeks to provide returns that closely correspond to returns provided by Reliance Gold Exchange Traded Fund (RGETF) which in turn invests in physical gold. It will essentially invest in Reliance Gold ETF but unlike buyers of gold ETFs, you don't need to have a demat account to buy it. It will provide returns of gold in paper form. The scheme's performance will be benchmarked against the price of physical gold.
What Reliance has essentially done is converted an ETF into a mutual fund product. This means Reliance can also offer it as a Systematic Investment Plan (SIP).
Reliance Gold Savings Fund is pitched as a good option for small investors who want to invest in gold. It has opened the doors for non-demat account holders as it provides the facility to invest through the online medium and through the physical application mode. Those who were not able to invest in gold ETFs since they did not have a demat account can now participate by investing in this Fund.
However, the issue is whether the product is truly beneficial for those whom it is meant for. The gold fund is aimed at those who do not even have a demat account.
Clearly, those who do not even have a demat account don't even know about the risks of equity or are risk-averse enough not to dabble in equity shares. Most investors like them have preferred a safe investment, such as fixed deposits.
When they invest in the Reliance gold mutual fund, would they be aware of the risks of investing in gold?
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 by 50-60% within a few months?
A second issue with the Fund is its cost structure. Entry load is nil and exit load is 2% if exited within one year; nil after one year. However, since this is a fund of fund (FOF) scheme, there might be ETF expense charges that one needs to pay. As per SEBI guidelines, a fund of fund can either charge 0.75% of total expenses or it can charge a maximum of 2.5% of total expenses including the weighted average total expenses of its underlying schemes, and not more than 0.75% as management fee from FOF investors. Though Reliance gold savings fund will charge 0.75% annually, it will cap the overall cost (FOF + ETF charges) at 1.5%.
Even then, a 1.5% cost is not insignificant.
R World–the mobile portal from Reliance Communications--would offer 24/7 live streaming of Radio Netherlands Worldwide
ADAG company Reliance Communications (RCom) has signed an agreement with broadcast company Radio Netherlands Worldwide.
Under the agreement, R World-the mobile portal from RCom--would offer 24/7 live streaming of Radio Netherlands Worldwide and will showcase its RNW WAP news feed on RWorld which includes regularly updated international news.
"News plays an important role in our day-to-day lives. Be it a college student, a young executive, a corporate chieftain or a small town entrepreneur," RCom 3G Head Prashant Gokarn said in a statement.
Radio Netherlands Worldwide (RNW) is a multilingual multimedia broadcasting company based in the Netherlands and has been in operation since last 60 years.
"We are extremely delighted about our collaboration with Radio Netherlands Worldwide to offer live news to our 125 million customers at touch of a button on R World," Gokarn said.
"This is the first telecom company with which we have a partner relationship and we are looking forward to many more on a global basis along with advancements in technology," said Jan Hoek, RNW's Director General.
RNW will be available on RWorld at browsing cost of 5 paise per 10kb.
On Friday, RCom ended 6.80% down at Rs93.15 on the Bombay Stock Exchange, while the benchmark Sensex declined 1.60% to 18,211.52.
L&T Infrastructure intends to raise Rs100 crore through its infrastructure bonds
L&T Infrastructure Finance Company, an L&T Group company, may undertake external commercial borrowings (ECB) route to raise funds in the next fiscal.
According to Ramesh Bhujang, vice president-risk and asset management, the company is exploring an option of going for ECBs in the first half of next fiscal.
"As per RBI guidelines, we are eligible to raise 50% of our net worth which is at present between Rs1,100 crore to Rs1,200 crore. We are in negotiations with a few banks. However we have not decided the exact amount. We will decide that based on market conditions," Bhujang said.
L&T Infra has come up with its second tranche of infrastructure bonds recently.
The company intends to raise up to Rs100 crore through these bonds with an option to retain an oversubscription of up to Rs300 crore for allotment of additional bonds.
GK Shettigar, vice president (Treasury) said the total outstanding advances of the company is Rs5,200 crore with a disbursement ratio of 35 per to power sector, 14% in road projects and 16% in oil and natural gas and telecom sectors.
On Friday, L&T ended 3.19% down at Rs1,639.75 on the Bombay Stock Exchange, while the benchmark Sensex declined 1.60% to 18,211.52.