Reliance Gold Savings Fund reopens for subscription
24 Oct 2013
Reliance Gold Savings Fund, which halted accepting fresh investments three months ago on 1 August, has opened for new investments again, to support government efforts to curb rising demand for the yellow metal and control rising trade deficit.
India's third biggest gold fund, which manages about $300 million (according to Lipper data), started accepting subscriptions from Wednesday, according to a notice sent to investors.
Reliance Gold Savings Fund allows customers to accumulate physical gold using a daily average pricing methodology. A minimum subscription of Rs1,000 per month translates to accumulation of gold for as low as Rs50 per day.
The plan can be subscribed for a tenure ranging from 1 year to 15 years. Customer can avail their statement of holding on a daily basis detailing the amount of gold accumulated and the purchase price of gold in a transparent manner.
At the end of the selected term of the plan, customers have the option to exchange their accumulated gold grams into 24 karat gold coins or jewellery at designated fulfilment outlets across India.
World Gold Council is the marketing partner for Reliance My Gold Plan while the product will be managed by RMPM.
The government and the central bank had undertaken a series of measures this year to curb the country's rising appetite for gold amidst rising international prices, a weak rupee and the country's widening trade deficit.
Gold constitutes the single largest item in India's import basket after oil, in terms of value.
The gold fund, part of the Anil Ambani group firm Reliance Capital, ranks as the third-largest fund in the country after funds run by Goldman Sachs and Reliance.
Announcing the relaunch, Sundeep Sikka, chief executive officer of Reliance Capital Asset Management, said, "The economic conditions are getting better and the dollar has come down."
Investment in gold is expected to increase as the dollar is in the weakening mode, which has led to a rally in gold prices.
At the same time, the government is faced with the challenge of finding gold supplies to jewellery industry amidst measures to slow. Gold import premiums in India have jumped to $120 an ounce over London prices as supplies have been unable to meet demand.
India's trade deficit, which hit a record in the year to March 2013, is also showing signs of narrowing in the current fiscal.
Moreover, the rupee, which saw record lows of 68.85 per dollar in late August, has appreciated 11 per cent since then and is ruing around levels of 61 to a dollar.
Gold ETFs had about Rs10,400 crore under management till September 2013, about 1 per cent of the industry's asset under management.
