Can somebody explain to me what the backing for GOLDBEES is?

[rmohan80]

Hi folks,

I've tried searching all over the net and this forum too. I know for instance QGOLDHALF actually busy GOLD whenever people invest in the ETF. But what is the backing for GOLDBEES? Is there actually some gold bought for the amount traded and kept somewhere? I could find no information on this anywhere. Your replies will be much appreciated and sorry if this is already answered somewhere

 

[ajfrod]

I think it is backed with gold, not sure if you can exchange it for real gold.

 

[ajfrod]

If it is not backed with gold, I think the company would be in trouble.

 

[sumosanammain]

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[Capricorn]

http://www.benchmarkfunds.com/Documents/BM_Combined_Bro_19th_jun_B2_dec2009.pdf

Cheers.

 

[AW10]

Some text from various places to answer your query..

The investment objective of the Scheme is to provide returns that, before expenses, closely correspond to the returns provided by domestic price of gold through physical Gold.

"The funds of the Gold BeES shall be invested only in gold or gold related instruments in accordance with the investment objective, except to the extent necessary to meet the liquidity requirements for honouring repurchases or redemptions, as disclosed in this SID. Presently as per SEBI Regulations, investments by the Scheme can be made only in physical gold. Investment in warehouse receipts and other permitted instruments linked to prices of Gold and units of international gold linked ETFs would be made as and when permitted by regulatory authorities."

Checkout following document for further details..

http://www.benchmarkfunds.com/Documents/SID_ETFs.pdf

Happy Investing