Gold Accumulation Facility in SBI Gold Mutual Fund

Investing in gold through mutual funds route is set to get more like investing in physical gold for some. SBI Mutual Fund has introduced a new feature through which investors can invest in its gold fund in terms of the weight of gold they wish to have.

This new feature called Gold Accumulation Facility applies only to SIP and STP in SBI Gold Fund. Instead of investing a fixed amount like a regular SIP, in this facility investors can specify a fixed quantity of gold units in SBI GETS. The amount of investment in rupees would change in each installment depending on the value of each unit of SBI GETS at that time.

SBI Gold Fund is actually a fund of fund scheme which invests in units of SBI Gold Exchange Traded Scheme (GETS). Each unit of SBI GETS in turn corresponds to 1 gram of gold. Investors with demat account can buy SBI GETS units from the stock exchange.

With Gold Accumulation Facility investors without demat account can regularly invest in fixed grams of gold indirectly. So for instance you can instruct that 5 units of SBI GETS be bought every month and the amount corresponding to 5 units at that time will be directly debited from your bank account every month. More features are tabulated below.

Features

SIP

STP

Frequency

Monthly, quarterly

Weekly, monthly, quarterly

Minimum units

1 GETS unit

1 GETS unit

Maximum amount per installment

Rs 1 lakh

 

Minimum no of installments

6 for monthly and 4 for quarterly

6 for weekly, monthly and 4 for quarterly

Gold Accumulation Facility in SBI Gold Fund is not going to enhance investors' returns investor but it may be appealing because many might like to relate to their gold investment in terms of quantity than in amount of rupees. A person who has opted for this facility might redeem a certain number of units of SBI GETS and get the value of those units at that day's NAV. His return rate will be no different from another person who has invested in regular terms.

Ultimately Gold Accumulation Facility is just a way of making investing in gold via mutual funds feel more like actually investing in gold in grams.


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