00:00Marun, we will talk about Gold ETF, but before that there is a very simple and basic question
00:12that why should any investor add gold to his portfolio?
00:16How does gold make the investor's portfolio strong?
00:20Thank you very much Bhavna ji, this is a very relevant question.
00:25Most of us invest in digital assets, and when you invest in digital assets, it comes to your mind
00:38to invest in stocks or mutual funds.
00:40But it is very important to know that the traditional asset class, gold, has also been financialized.
00:47As you said, everyone knows that gold is one of the oldest, if not the oldest,
00:52one of the oldest asset class and people have been investing in it since the 19th century.
00:59At that time, gold coin was also used as a currency.
01:04If we talk about any asset class, first of all, we look at its returns.
01:11If we look at long term returns, 1 year, 3 years, 5 years, 10 years, 15 years or 18 years,
01:17then you will see that gold has given good returns in many places, it has also beaten Nifty 50 in many places.
01:23If you look at the last 1 year returns, gold had 28.5% returns whereas Nifty had a little less.
01:30And in the long term, in 18 years, gold has given 1-2% more returns than Nifty.
01:34But we talked about the long term, but if you look at the short term,
01:38in the short term, if you look at any time period where there is a risk in the system,
01:43where there is a market downturn, you will see that gold has almost always outperformed the market.
01:50The reason for this is that gold's correlation with equity is very limited.
01:55It is a completely different asset class and its correlation with debt is also very limited.
01:59And it is considered as a hedge.
02:01Hedge means that if you have a core portfolio,
02:04then when your core portfolio goes down, it will balance out.
02:10So many investors use gold as a hedge.
02:13And this usually happens to manage the market risk.
02:18Like if the market is at an all-time high or if there is volatility.
02:21And if you look at any time period, like we have seen many time periods.
02:25I will tell you one by one.
02:27We saw the subprime crisis from January to March 2008.
02:30Nifty 50 had fallen from 22.5% to minus 22.5% returns.
02:36At the same time, gold's returns were about 10%.
02:39If you look at July-September 2011, where Nifty 50 had given minus 13.85% returns.
02:46At that time, gold had given 9% plus returns.
02:48Similarly, we have many such scenarios.
02:51And specifically when a systemic risk is built, like the dot-com bubble in 2001-2002.
02:56When there was a subprime crisis, like I told you.
02:58So whenever we have seen that gold has always outperformed equity.
03:04And in the long term, its returns are almost at par with Nifty 50.
03:08So that's why we always recommend our investors.
03:11That some percentage of allocation should be in gold.
03:14And that can be according to your risk appetite.
03:16Either between 5%-25% as you think is right.
03:22That means gold's return has always been good.
03:26Even many times gold's return has beaten Nifty 50.
03:29So it is a safe haven asset.
03:31But you can invest in gold according to your risk appetite.
03:36But Varun, tell us why should gold be added in the form of ETF?
03:40ETF is a very interesting concept.
03:45I will explain it to you in detail.
03:47Till now, our investors used to think that we should buy physical gold.
03:54But there are many types of risks in physical gold.
03:57First of all, there is no parity in the price.
04:00If you are buying from Delhi, Mumbai or Bangalore.
04:03The prices are different everywhere.
04:05There are making charges, GST.
04:07There are many types of charges.
04:09There is a risk associated with it.
04:12There is a storage cost.
04:13Where will you keep it?
04:14You will have to manage it.
04:15And even if you sell it at some time, you will have to pay different charges.
04:20And you can never be sure of its purity.
04:25What does gold ETF do?
04:29All the gold units that you buy online.
04:3299.5% purity gold is deposited in a vault.
04:38The vault is managed by a custodian.
04:40It is an arm of SBI called SBISG.
04:42And the gold is completely insured.
04:44And because it is completely regulated and semi-regulated.
04:50There is no impurity in it.
04:52The process is completely well established.
04:54There is no possibility of any problem.
04:57You can invest in gold without any extra charges.
05:02Whether you invest in physical gold or ETF.
05:07The more gold you have, the more returns you will get.
05:11But because there is no extra charge in it.
05:14There is no charge when you invest.
05:17There is no charge when you withdraw.
05:20AMC has an expense ratio of 40-50 bps.
05:23Which is very less compared to 3% and GST.
05:27And making charges and selling charges etc.
05:31In this, your returns are more than physical gold.
05:34And there is no risk of any kind.
05:36ETF operates like this.
05:38The most important thing is that it will come in your Demat account.
05:41You can liquidate it anytime.
05:43There is complete liquidity in it.
05:45You don't have to wait where to sell your gold.
05:48Where to access this money.
05:50You can buy it immediately or sell it immediately.
05:52This functionality, ease of access and complete transparency.
05:56Gold investors get from gold ETF.
05:58Varun, our comparison was of physical gold.
06:02And ours was of ETF.
06:04But if we look at it digitally.
06:08We have many other ways to invest in gold digitally.
06:13But why is it an advantage to choose gold ETF?
06:18I will tell you two more ways.
06:20How people have invested in gold digitally.
06:22One is that there is a new category called digital gold.
06:25Digital gold is also transparent.
06:28You get gold price in it.
06:30But the most important point is that
06:32When you go to sell it, it takes 3% charge.
06:35That can be selling charge or whatever it is.
06:39So that 3% charge goes away from your return immediately.
06:43Which will not go in gold ETF.
06:45Second is that it is not a completely regulated way.
06:49For example, gold ETF is completely regulated.
06:52There is voltage, SBISG, etc.
06:56So there is complete surety in it.
06:58There is no possibility of any loss.
07:01Digital gold is not completely regulated.
07:03Regulation is yet to come.
07:06So in terms of safety, I would say gold ETF is significantly higher.
07:12Another way is SGB.
07:15Sovereign Gold Bond.
07:16Which has become very popular among investors.
07:18Sovereign Gold Bond is also a good way to invest in gold.
07:24The fundamental problem that I face on a personal level is that
07:28There is some liquidity issue in it.
07:30Because it has 69 tranches.
07:32And every tranche has a different type of investor.
07:34While gold ETF is a mutual fund scheme.
07:37There are many investors in it.
07:39So liquidity will always be there.
07:41We also provide liquidity to customers through market maker.
07:44While in SGB, there is some liquidity issue.
07:48And at the same time, there is no new tranche since February 2024.
07:53So there is no new tranche in this financial year.
07:56So the government is also thinking that it is a costly deal.
08:01Because of which they are raising money from the market.
08:03But overall, I think if you want to invest in gold.
08:09If you want to grow your portfolio with the growth of gold.
08:12Then better medium than gold ETF.
08:14Right now, I don't think to invest in digital gold.
08:17We are talking about gold ETF.
08:19Please tell us about Grow Gold ETF.
08:22What is it? How does it work?
08:25Grow Gold ETF is a semi-regulated scheme.
08:29As I told you, we invest as much money as the user can.
08:34Minimum investment in this is Rs. 500 in NFO.
08:36But after NFO, you can also take 1 by 100 gram of gold.
08:41For example, the price of 1 gram of gold is around Rs. 7800.
08:46And the price of 1 unit is Rs. 78.
08:49So you can start investing in gold ETF from Rs. 78.
08:54After this, the amount of gold you invest.
08:59At the end of the day, we deposit it in a vault.
09:04Which is a regulated process.
09:06As I told you, our custodian is SBISG.
09:08And that gold is completely insured against all types of risk.
09:12Any act of God or terror risk.
09:15Gold is insured against all types of risk.
09:17So your asset is completely insured.
09:19And completely safe.
09:21And you can sell it anytime.
09:23You can access it anytime in the market.
09:25So this is how Grow Gold ETF operates.
09:27And the daily gain or loss.
09:29The price benchmark of gold is LBMSA.
09:32So LBMSA is the largest bullion market in the world.
09:39From where the price of gold is decided.
09:41So in the same way, gold ETF operates.
09:50And in real time, gold prices are up or down.
09:52You can access it anytime in the market.
09:54The scheme that Grow Gold ETF has launched.
09:57So why has this scheme been launched in the festive season?
10:01Because we are seeing that gold prices are increasing.
10:07Gold prices are coming at an all-time high.
10:09So what is the reason?
10:11There are two questions here.
10:13We have launched it because of gold prices.
10:16We believe that gold is an evergreen investment product.
10:20You can invest in it anytime.
10:24And at that time, you should invest specially.
10:27When you see some volatility in the market.
10:29When you see some volatility in the equity market.
10:31Or when you see some risk in the equity market.
10:34So there are many factors that have come in the launch of our gold.
10:39For example, there has been a custom duty reduction.
10:42Because of this, gold prices have gone down.
10:44I will explain the importance of custom duty reduction.
10:50India is the second largest country in the world.
10:53Just next to China by a small amount.
10:55Which uses gold.
10:57And the majority of our gold is imported.
11:00So our import duty has reduced from 15% to 6%.
11:04Because of this, gold prices have gone down.
11:07Second, the Fed rate has been cut recently.
11:10And we have seen that whenever the Fed rate is cut.
11:14Then the gold prices increase.
11:16Because the demand for gold increases.
11:18Because there is excess liquidity in the market.
11:21So many things are coming together.
11:24Because of this, we have decided that gold is a good product.
11:27Which we should launch.
11:29Customers should be given an option.
11:31Customers who are worried about the market position and volatility.
11:35They can invest in gold.
11:37Everyone should invest.
11:38A small portfolio.
11:39And those who are more worried can also think of investing more.
11:42By consulting with their financial advisor.
11:44The second question you asked was.
11:47Why did you launch in Diwali and festive season?
11:52We have always had an objective in Groww.
11:57We want to connect more investors with the market.
12:03So that they can benefit from the growth of the market.
12:07Gold ETF has been existing in the market for a long time.
12:13But very few people know about it.
12:16Many people invest in the market.
12:18If you see, there are 5 crore investors of mutual funds.
12:22But there are very few investors of gold ETF.
12:25Because people don't know about it.
12:27People who know about it take advantage of it.
12:29As soon as the reduction in custom duty happened.
12:31In July, there was an inflow of 1300 crores in gold ETF.
12:36Many people could not take advantage of this opportunity.
12:39We want to tell people about gold through this festival season.
12:44Tell them that this is a new product.
12:47Give them an opportunity to take advantage of this growth in the long term.
12:53Perfect timing to launch gold ETF.
12:56Who can invest in Groww Gold ETF?
12:59Did you have a specific audience for this?
13:02Or any investor who wants to invest in gold can invest in it.
13:07Many products have a risk.
13:10Customers should invest according to their appetite.
13:13Especially in equity products.
13:14Gold is a product in which every investor should invest in their portfolio.
13:19I can say this with confidence.
13:22How much you allocate for your portfolio depends on your risk profile.
13:26Equity has an opposite effect.
13:28If you have a high risk appetite, invest less in gold.
13:33If you have a moderate risk appetite, invest more in gold.
13:36And so on and so forth.
13:37I suggest that everyone can invest in gold.
13:43You can invest at any time.
13:45And you should do it.
13:46Because it hedges your market risk in your portfolio.
Comments