Kotak MF for files offer document with SEBI for gold ETF

Kotak Mutual Fund has filed an offer document with market regulator SEBI for a Gold Exchange Traded Fund (ETF) and appointed Deutsche Bank AG and Standard Chartered as custodians for the proposed fund.

Mumbai, Jan 03: Kotak Mutual Fund has filed an offer document with market regulator SEBI for a Gold Exchange Traded Fund (ETF) and appointed Deutsche Bank AG and Standard Chartered as custodians for the proposed fund.

The banks have been appointed subject to regulatory approvals, according to the Kotak offer document.

Market regulator Sebi has allowed MFs in India to offer mutual fund schemes that invest in physical gold. It recently allowed them to outsource services of a third party for the custody of the yellow metal.

The open-ended Kotak Gold ETF, like the previous offer documents of Benchmark MF and UTI MF for similar schemes, now awaits SEBI nod to see the light of the day.

The Kotak Gold ETF proposes to invest in gold, engage in gold lending, deposit gold with banks in return for fees to the extent permitted by regulators.

The fund may also invest in gold related instruments and bank deposits to the extent regulations permit, the offer document said.

All residual funds, after investing in gold, will be invested in debt and money market instruments. The minimum investment amount for opening account during the new fund offer period has been kept as Rs 5,000.

The proposed scheme will have units of Rs 10 each with applicable load of four per cent and exit load of one per cent.
Bureau Report

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