Advisors are expecting high demand for paper gold from investors during the auspicious occasion.
Increasing awareness, ease of trading and good returns have made gold funds popular among investors. As a result, the upcoming Akshaya Tritiya festival holds a lot of promise for distributors, who are using text messages, mailers and brochures to target their clients.
Mumbai-based advisor Ritesh Sheth of Tejas Consultancy has tied up with jewellers to promote gold funds. “We are distributing co-branded brochures through newspapers by tying up with local jewellers. We have already got some enquiries and we are expecting more investors to come in. We are promoting the advantages of gold fund-of-funds,” says Ritesh.
National distributor Prudent is expecting 25% of total SIP applications through gold funds this year. “We are seeing increased demand for gold funds because of the good returns. We are shooting out email and SMS campaigns focused on our partners and investors. Normally we get 10% to 12% of SIP applications through gold funds. This year we are expecting to get around 25% SIP applications in gold funds,” says Shirish Patel, CEO, Prudent Corporate Advisory.
Some IFAs are showcasing the advantages of gold funds vis-à-vis buying physical gold. “We are pitching gold funds against the schemes offered by leading jewellers. The returns are better from gold funds compared to buying gold through physical mode. It’s an eye opener for investors. We are promoting gold funds through SIP mode for a time horizon of at least five years. We are rolling out an SMS campaign and investors are showing interest,” says Neeraj Bahal of Fasttrack Investments.
Many fund houses have launched gold fund-of-funds to cash in on the Indian investor’s insatiable appetite for the yellow metal. The demand for gold funds has been spectacular which is evident from the rising assets in gold ETFs. Total AUM of gold ETFs went up to Rs. 9,886 crore in March 2012 from Rs. 4,800 crore in April 2011.
