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  • ICICI Prudential Gold iWIN ETF

  • ICICI Prudential Gold ETF is a mutual fund which is offered by ICICI Prudential Asset Management Company Ltd. The product was formerly known as the ICICI Prudential Gold iWIN ETF. With effect from 10 April 2018, the product is called ICICI Prudential Gold ETF. ETF stands for Exchange Traded Fund.

    The ICICI Prudential Asset Management Company Ltd. is one of the largest and fastest growing asset management companies (AMCs) in India. The primary target of the AMC is to convert the savings into investments and help the investors in creating long term wealth. A wide variety of products is offered by the AMC. Investors of all types and investment criteria will be able to find out the product which is suitable for fulfilling their investment requirements.

    Investment Objective of the ICICI Prudential Gold ETF

    The objective of investment of the ICICI Prudential Gold ETF scheme is to offer returns from investments that are responsible for tracking the performance of the domestic price of gold, before expenses. The acquisition of the domestic price is made from the LBMA AM fixing prices. However, it should be kept in mind that on the basis of tracking error of the underlying gold, the performance of the scheme might be different. The achievement of the investment objective is also not assured.

    Key Features of the ICICI Prudential Gold ETF

    The main features of the ICICI Prudential Gold ETF scheme are as follows:

    Type of fund An open ended exchange traded fund
    Plans available No plans are offered under the scheme as of now*
    Options under each plan No options or sub-options are offered under the scheme as of now*
    Risk Moderately high
    Systematic Investment Plan (SIP) Not available
    Systematic Transfer Plan (STP) Not available
    Systematic Withdrawal Plan (SWP) Not available

    *There are no plans, options, or sub-options under the scheme as of now. However, the rights of the introduction of any plan, option, or sub-option under the scheme at a future date is reserved by the trustee.

    Investment Amount for the ICICI Prudential Gold ETF

    Minimum application amount
    • Application made through NSE and BSE - 1 unit* (thereafter in multiples of 1 unit)
    • Application made directly through the AMC - 10,000 units (in multiples thereof)
    *1 unit is equal to 0.1 gram of gold approximately.
    Minimum additional investment N/A
    Minimum instalment for Systematic Investment Plan (SIP) N/A
    Minimum instalment for Systematic Withdrawal Plan (SWP) N/A
    Entry Load N/A
    Exit Load Nil

    Asset Allocation of the ICICI Prudential Gold ETF

    Type of security Indicative Allocations (percentage of total assets) Risk Profile
    Minimum Maximum High/Medium/Low
    Investment in gold bullions and other instruments with gold as per the SEBI regulations 95% 100% Medium
    Debt and Money Market Instruments which includes cash and cash equivalent 0% 5% Low to Medium

    Who can Invest in the ICICI Prudential Gold ETF?

    The entities listed below are eligible to subscribe to the units of the ICICI Prudential Gold ETF:

    • Resident Individuals can invest singly or jointly. However, investments on a joint basis can be made by a maximum of 4 individuals.
    • Overseas Citizen of India (OCI)
    • Hindu Undivided Family (HUF) through a Karta
    • Non-Resident Indians (NRIs)
    • Limited Liability Partnerships
    • A guardian or parent on behalf of a minor
    • Companies
    • Proprietorship which is under a sole proprietor
    • Scientific and Industrial Research Organisations
    • Association of Persons (AOP)
    • Bodies of Individuals (BOI)
    • Bodies Corporate incorporated outside India with prior permission from the Government of India
    • Public Sector Undertakings (PSUs)
    • Partnership Firms
    • RBI
    • Persons of Indian Origin (PIOs)
    • Bodies and units created by Navy
    • Banks and Financial Institutions (banks include both Co-operative Banks and Regional Rural Banks (RRBs))
    • Bodies Corporate
    • Bodies and units created by Air Force
    • Religious and Charitable Trusts
    • Bodies and units created by Army
    • Foreign Portfolio Investors (FPI) who are registered under SEBI
    • Bodies and units created by other paramilitary units and so on.

    NAV Disclosure and Benchmark for the ICICI Prudential Gold ETF

    There are two steps for the calculation of the Net Asset Value (NAV) of each unit under the ICICI Prudential Gold ETF:

    1. Valuation of gold
    2. Calculation of Net Asset Value or NAV

    Valuation of gold:

    • The gold which is held under the scheme should be valued on the basis of the AM fixing price of London Bullion Market Association (LBMA). This is valued at US dollars per troy ounce. The fineness of the gold is marked at 995.0 parts out of every thousand. However, this is subject to certain regulations.
    • The gold in the gold exchange traded fund scheme has to be in the form of standard gold bars. They are required to be converted into such gold bars if they are not in that form. This is done in compliance with the norms prescribed by the LBMA for good delivery.
    • On the day of valuation of Net Asset Value or NAV, the market price of gold in the domestic market is ascertained as follows: Price of gold in domestic market = (London Bullion Market Association (LBMA) AM fixing in US Dollar/ounce X Conversion factor for converting ounce into kg for 0.995 fineness X rate for US Dollar into Indian Rupees or INR) + custom duty for import of gold + sales tax/octroi and other levies applicable.

    Calculation of Net Asset Value or NAV:

    The following formula is used to ascertain the NAV of each unit under the scheme:

    NAV (In Indian Rupees or INR) = (Market or Fair Value of Scheme Investments + Current Assets including Accrued Income - Current Liabilities and Provisions) / Number of Units outstanding under the scheme on the day of valuation.

    The valuation of the fund will be done according to the norms prescribed in Schedule VIII of the Regulations or SEBI. The NAV of the scheme will be calculated and published by the end of every working day.

    The benchmark of the ICICI Prudential Gold ETF scheme will be ascertained as per the domestic price of gold which is derived from the LBMA AM fixing prices.

    ICICI Prudential Gold ETF - Fund Manager

    As on 31 January 2018, the investments under the ICICI Prudential Gold ETF scheme is managed by Mr. Manish Banthia. He has been managing the scheme since September 2012. In addition to being a Chartered Accountant, he has a Bachelor’s degree in commerce along with an MBA degree.

    Investment Restrictions of the ICICI Prudential Gold ETF

    The ICICI Prudential Gold ETF scheme has certain restrictions in terms of investment. Some of these restrictions are listed below:

    • Investments should not be made by mutual fund schemes in any security of an associate or group company of the sponsor which is not listed.
    • Investments should not be made by mutual fund schemes in any fund of funds scheme.
    • The scheme should not advance any loans for any purpose.
    • For parking of fees in short term deposits of commercial banks which are scheduled, the asset management companies (AMCs) should not charge any investment management and advisory charges.
    • Investments can be made by mutual fund schemes in the securities of group companies of the sponsors only to the extent of 25% of the net asset value or NAV of the scheme.
    • Investments should not be made by mutual fund schemes in any security which is issued through private placement by an associate or group company of the sponsor.
    • Short term deposits should be held in the name of the concerned scheme.
    • A mutual fund scheme can invest only 10% of its net asset value or NAV in debt instruments which are issued by a single issuer. These debt instruments comprise both money market instruments and non-money market instruments.
    • The investments made by a mutual fund scheme in debt instruments issued by a single user can be extended to up to 12% of its net asset value or NAV. However, prior approval is to be taken from the Board of directors of the asset management company (AMC) as well as the Board of trustees.

    Dividend Policy of the ICICI Prudential Gold ETF

    The warrants for dividends should be dispatched to the unitholders within a time period of 30 days starting from the date of declaration of the dividend. The unclaimed redemption and the amount of dividend will be treated as per the norms prescribed in the SEBI Circular dated 25 February 2016.

    Why should you invest in the ICICI Prudential Gold ETF?

    The ICICI Prudential Gold ETF is a product offered by ICICI Prudential Asset Management Company (AMC) Ltd. As an AMC, the ICICI Prudential AMC Ltd. is a large scale company. It offers a wide range of products for their customers. Investors of all groups can find a product as per their investment criteria. The AMC is a company which has been growing rapidly and has a huge base of investors. The company is sponsored by giants of the financial sector such as ICICI Bank and Prudential Corporation Asia (PCA). This leads to more reliability and thus, a safer option. If the investment objectives of an investor match that of the ICICI Prudential Gold ETF (formerly known as the ICICI Prudential Gold iWIN ETF), it is one of the best products to invest in.

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