nfo ppt goldetf final

8/6/2019 NFO Ppt GoldETF Final

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Copyright: Birla Sun Life Asset Management Company Ltd.

Birla Sun Life Asset Management Company Ltd.Mutual Fund investments are subject to market risksPlease read the SID & SAI carefully before investing

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Birla Sun Life Gold ETFAn Open-ended Gold Exchange Traded Fund


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Mutual Fund investments are subject to market risksPlease read the SID & SAI carefully before investing

1. Investing in Gold

2. Gold: Rising Demand

3. Why Gold ETF

4. Birla Sun Life Gold ETF

5. Disclaimers, Statutory details & Risk Factors

Contents


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Investing in Gold

As an inflation hedge

As a portfolio diversifier


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When we have gold we are in fear

when we have none we are in danger.

- English Proverb


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Mutual Fund investments are subject to market risksPlease read the SID & SAI carefully before investing

Gold is a symbol of wealth and good fortune

It is viewed as a secure, value preserver, and is the second preferredinvestment after bank deposits

It is a good instrument for diversifying your investment portfolio due toits low correlation with most other asset classes

Gold tends to rise in value during times of rising inflation, thusproviding an effective hedge against price increases in long-term

Gold


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Birla Sun Life Asset Management Company Ltd.Mutual Fund investments are subject to market risks

Please read the SID & SAI carefully before investing

6

Mutual Fund investments are subject to market risks


Gold has traditionallyperformed well in periods ofrising inflation.

Returns from Gold in the last

decade (CY 2001 2010)have been well aboveinflation.

Gold: An effective inflation Hedge

Source: World Gold Council (WGC), Bloomberg


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Gold has a low correlation with most asset classes & markets.

This makes gold an excellent tool for diversifying your portfolio.

Gold: A portfolio Diversifier

1.00

-0.07 -0.05-0.18

0.08

-0.13

-0.05

-1.00

-0.50

0.00

0.50

1.00

Gold

LBMA

(INR/oz)

BSE 200 BSE

SENSEX

3-month

CD

MSCI EM MSCI US MSCI

India

Correlation to Gold (INR)

Source: World Gold Council Calculations in INR wherever applicable.Correlations based on 3 year weekly returns upto 24th Dec 2010


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Gold Demand - Supply

Rising Global Demand

High Demand in India & ChinaSuppliers turning into buyers


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Driven by High Demand in India & China

= 52% ofworld demand

Source: WGC

India and China are not only the largest demand centers for Gold, but also seeingthe demand grow at a rapid pace.


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In spite of rising prices, Indian jewellery demand rose 69% year-on-year, resulting ina new annual record total of 746 tonnes in 2010.

Gold jewellery represents about 75% of Indian gold demand for 2010

Gold: Rising Jewellery Demand in India

Source: WGC


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Gold: Rising Jewellery Demand in China

The estimated per-capita jewellery demand in China (2009) is extremely low at 0.26 gms, ascompared to its other Asian counterparts like South Korea & Taiwan (~ 1.2 to 1.4 gms).

However, as per a recent report, Chinas jewellery demand in 2010 is estimated to haveincreased by 13% to reach a new annual record of 400 tonnes, in spite of a rise in prices.

Source: World Gold Council (WGC). Includes both investment & jewellery demand.

Source: WGC


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From 1989 to 2007 net official sector sales averaged 400-500 tonnes per year

In 2010, the official sector became a net buyer of gold for the first time in 21 years.

Emerging market economies experiencing rapid growth have been large buyers of gold, diversifying theirexternal reserves.

European central banks which for two decades had been selling gold have virtually stopped sales inthe wake of the financial and European sovereign debt crises.

These two forces have considerably reduced the supply of gold to the market.

Suppliers turning into buyers!

Net Sales / purch

ases of Gold by Official Sector (Tonnes)

Note: Official sector means central banks and other official institutions like IMF. Source: WGC


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Why Gold ETF?


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Ease of Purchase: Investors can purchase units directly from the AMC duringNFO period, and from the stock exchange during ongoing offer period.

Ease of Storage: Easier to hold Gold ETF units in a Demat form rather thanBuying physical gold and storing them in lockers, with the added risk of theft.

Assured for purity: The underlying gold is held in the form of 1kg Gold Barshaving purity of 99.5% or higher, sourced from LBMA^Approved Refiners.

Low Transmission losses: Lower charges incurred in buying-selling of gold ascompared to Jewellery which costs higher in form of making charges at the timeof purchase, and a high deduction at the time of selling the gold.

Tax benefit: Indexation benefit for Long Term Capital gains available after oneyear in Gold ETF, as against 3 years for Physical Gold. Moreover, Wealth Tax ispayable on Gold Jewellery and bars, but not on ETFs.

Why Gold ETF?

^ LBMA = London Bullion Market Association

(Note: Investors should be advised to consult their tax advisor in viewof individual nature of tax benefits before investing)


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G d TF G d ns & s J w y

g qu m n Demat Account Locker / Safe Locker / Safe

Impu y R sk Not Possible Possible Possible

v b n m

n m n ns

1 unit can also bepurchased at market

price.

B

anks / Jewelers maycharge higher for

smaller coin sizes.

Depends on theJewelery design &

type.

T x n n P c

pp c n

upto 1 Yr STCG *

1Yr + LTCG* with

Indexation benefit

upto 3 Yr STCG

3Yr + LTCG with

indexation benefit

upto 3 Yr STCG

3Yr + LTCG with

indexation benefit

W h T x Not Applicable Applicable Applicable

Comparison

LTCG = Long Term Capital Gains,STCG = Short Term Capital Gains

(Note: Investors should be advised to consult their tax advisor in viewof individual nature of tax benefits before investing)


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Gold ETFs getting increasingly popular

Source: MFI Explorer, Internal Computation

Since 2007 the number of Gold ETF schemes in India have grown five fold, with ~15x increase inAssets Under Management.

The AUM has increased 2x in last 9 months, as against gold price increase of 10.4%, showing theinvestors increasing awareness and preference for ETFs as a medium of investing in Gold.


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When we have gold we are in fear

when we have none we are in danger.

- English Proverb

Gold

ETF No

FearNo Danger


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Birla Sun Life Gold ETF

Key Features

Benefits vs Physical GoldHow does it work?

NFO Details


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Birla Sun Life Asset Management Company Ltd.



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Scheme Name Birla Sun Life Gold ETF (BSL Gold ETF)

Investment Objective The investment objective of the Scheme is to generate returns that are in linewith the performance of gold, subject to tracking errors.

Scheme Type An Open ended Gold Exchange Traded Fund

Asset Allocation Physical Gold: 95% - 100%Debt & Money Market Instruments: 0% - 5% (including cash & Cash

Equivalents)Minimum Purchase

during NFO

Minimum of Rs. 6,000/- and in multiples of Rs. 2000/- thereafter perapplication

Benchmark The performance of the scheme will be benchmarked against the Domesticprice of physical gold.

Fund Manager Mr. Satyabrata Mohanty

Load Structure # Entry load: NilExit load: Nil (Including for fractional units)

Key Features

# The units of the scheme are compulsorily traded in dematerialized form, and hence, there shall be no entry/exit load for the unitspurchased or sold through stock exchanges. However, the investor shall have to bear costs in form of bid/ask spread andbrokerage or such other cost as charged by his broker for transacting in units of the scheme through secondary market.


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Potentially cheaper to have price exposure to gold price as compared to other

available avenues

Can be traded on stock exchange like buying / selling a stock. Quick and convenient

dealing through Demat account

No storage and security issue for investors

Transparent pricing

Taxation of non-equity Mutual Fund. No Wealth Tax.

Ideal for retail investors as minimum lot size to trade is one unit of Gold ETF whichis approximately equal to one gram of Gold.

Benefits vs Physical Gold


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Option to convert to Physical Gold# provided by certain vendors

Investors will be provided an option to convert from Demat form to Physical Gold bysome of our vendors

Benefit traditional savings in gold can be replaced by ETF at market price today

and investor can enjoy benefits of higher safety, easier holding/storage and lowertransmission loss to reconvert traditional jewellery at the time of need. At time ofneed ETF can be reconverted to physical Gold of highest purity at market price

Additional benefit of Birla Sun Life Gold ETF

# Birla Sun Life Asset Management Company Ltd. (BSLAMC) shall, for the convenience ofunitholders, endeavor to provide the updated list/details of the vendor/s to facilitate sucharrangement/s between the Unit holder and the vendor/s. The Unitholders may opt to enterinto the arrangement/s with the Vendor, on such terms as may be mutually agreeablebetween the unit holder and vendor. The Unit holder agrees and acknowledges that neitherBirla Sun Life Mutual Fund, its Trustees, nor BSLAMC shall, in any manner whatsoever, be

responsible and/or liable with respect to, or in connection with, any such arrangement/s.


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Note: The role of the AMC is of a facilitator to the Authorized Participants / Large Investors to purchase /sell Gold on their behalf for the purpose of creating/redeeming Units of the scheme in Creation Unit Size.

How does BSL Gold ETF Work?

Here is an illustration on the working of Birla Sun Life Gold ETF.


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Birla Sun Life Gold ETF

New Fund Offer Opens on: 25thApr 2011

New Fund Offer Closes on: 09th May 2011

Scheme Re-opens on: Not later than 24th May 2011

NFODetails


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This document is strictly confidential and meant for private circulation only and should not atany point of time be construed to be an invitation to the public for subscribing to the units ofBirla Sun Life Mutual Fund. Please note that this is not an advertisement. The document issolely for the information and understanding of intended recipients only. If you are not theintended recipient, you are hereby notified that any use, distribution, reproduction or any actiontaken or omitted to be taken in reliance upon the same is prohibited and may be unlawful.Views expressed herein should not be construed as investment advice to any party and are notnecessarily those of Birla Sun Life Asset Management Company Ltd.(BSLAMC) or any of theirofficers, employees, personnel, directors and BSLAMC and its officers, employees, personnel,directors do not accept responsibility for the editorial content. Wherever possible, all the figuresand data given are dated, and the same may or may not be relevant at a future date. Furtherthe opinions expressed and facts referred to in this document are subject to change withoutnotice and BSLAMC is under no obligation to update the same. While utmost care has beenexercised, BSLAMC or any of its officers, employees, personnel, directors make norepresentation or warranty, express or implied, as to the accuracy, completeness or reliability of

the content and hereby disclaim any liability with regard to the same. Recipients of this materialshould exercise due care and read the scheme information document (including if necessary,obtaining the advice of tax/legal/accounting/ financial/other professional(s) prior to taking of anydecision, acting or omitting to act. Further, the recipient shall not copy/circulate contents of thisdocument, in part or in whole, or in any other manner whatsoever without prior and explicitapproval of BSLAMC.

Disclaimers


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Disclaimer Clause of NSE

/ BSE

: It is to be distinctly understood that the permission given byNational Stock Exchange of India Limited (NSE) / Bombay Stock Exchange Ltd. (BSE) shouldnot in any way be deemed or construed that the Scheme Information Document has beencleared or approved by NSE/BSE nor does it certify the correctness or completeness of any ofthe contents of the Draft Scheme Information Document. The investors are advised to refer tothe Scheme Information Document for the full text of the Disclaimer Clause of NSE/BSE.

Statutory Details - Constitution: Birla Sun Life Mutual Fund has been set up as a Trust under

the Indian Trusts Act, 1882. Sponsors:Aditya Birla Financial Services Private Limited and SunLife (India) AMC Investments Inc. [liability restricted to seed corpus of Rs. 1 Lac]. Trustee:Birla Sun Life Trustee Company Pvt. Ltd. Investment Manager: Birla Sun Life AssetManagement Company Ltd.

Scheme Classification and Objective: Birla Sun Life Gold ETF: (An Open ended GoldExchange Traded Fund) with an investment objective to generate returns that are in line withthe performance of gold, subject to tracking errors.

Asset Allocation: Physical gold*: 95-100%, Debt & Money Market Instruments (including cash

& cash equivalent): 0%-5%. *The Scheme will invest in physical gold of the prescribed qualityand standard. Issue Price: Offer of Units at face value of Rs. 10 each at a premium equivalentto the difference between the allotment price and the face value during the New Fund Offer(NFO) and at NAV based prices for Creation unit on an ongoing basis. Allotment price for theNFO shall be approximately equal to 1 (one) gram of gold.

Disclaimers & Statutory Details


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Minimum Application amount: During NFO: Rs. 6,000/- and in multiples of Rs. 2,000/- thereafter. DuringOngoing Offer period: Units of scheme may be subscribed to / redeemed in Creation Unit size of 1,000units & in multiples thereof, by Authorised Participants and Large Investors on any business day directlywith the Mutual Fund at applicable NAV and transaction charges, if any. Terms of Issue/Liquidity: Unitsof the scheme shall be available and compulsorily be issued/repurchased and traded in

dematerialized form. The Units of the scheme will be listed on NSE and BSE and all categories ofInvestors may purchase the units of the scheme through the Stock exchange(s) on which the units of thescheme are listed on any trading day in round lot of 1 (one) Unit at the prevailing listed price. The Fund

may also allot fractional units for subscriptions / purchase requests received only during NFO of thescheme. These fractional units may be redeemed by unitholders on any business day during the ongoingoffer period at applicable NAV directly with Mutual Fund/AMC and these fractional units shall not beavailable for trading on Stock Exchange(s). Load Structure: Entry Load: Nil; Exit Load (including forfractional units): Nil. The units of the scheme are compulsorily traded in dematerialized form, and hence,there shall be no entry/exit load for the units purchased or sold through stock exchanges. However, theinvestor shall have to bear costs in form of bid/ask spread or brokerage or such other cost as charged byhis broker for transacting in units of the scheme through secondary market. Unitholder Information &

General Services: No separate account statement will be issued to the Unit holders since the statement ofaccount furnished by depository participant will contain the details of transactions. The AMC will calculateand disclose the first NAV of the scheme not later than 5 business days from the date of allotment.Thereafter, the NAV of the Scheme will be calculated on all business days.

Statutory Details


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MutualF

unds and securities investments are subject to market risks and th

ere can be noassurance or guarantee that the objective of the Scheme will be achieved. As with anyinvestment in securities, the NAV of the Units issued under the Scheme may go up ordown depending on the various factors and forces affecting capital markets and moneymarkets. Past performance of the Sponsors / Investment Manager / Mutual Fund does notindicate the future performance of the Scheme and may not necessarily provide a basis ofcomparison with other investments. Birla Sun Life Gold ETF is only name of the Scheme anddoes not, in any manner, indicate either the quality of the Scheme or its future prospectsor returns. Unitholders in the Scheme are not being offered any guaranteed/assured returns.Scheme Specific Risk Factors:As the Scheme will invest primarily in physical gold, thescheme's performance shall relate directly to the value of the gold and fluctuations in the price ofgold could adversely affect investment value of the units. The price of gold may be affected byseveral factors such as demand and supply of gold in India, change in political, economicalenvironment and government policy, changes in interest rates and perceived trends in bullionprices, inflation trends, market movements, etc. The scheme shall also be subject to, but notlimited to, risks related to liquidity, regulatory, passive investments, redemption, trading, assetclass, currency, loss of physical gold, counter party, indirect taxation, etc. Further, tracking errormay cause the scheme to generate returns which are not in line with the performance of gold.The scheme may invest in debt and money market instruments to meet the liquidity

requirements. Accordingly, scheme shall be subject to risks associated with investments in FixedIncome securities such as Price-Risk or Interest-Rate Risk, Credit Risk, Liquidity or MarketabilityRisk, Reinvestment Risk etc. Please read the Scheme Information Document for detailedScheme Specific Risk Factors. Investors should read the Scheme Information Document /Statement of Additional Information / Key Information Memorandum available at InvestorService Centers and withDistributors carefully before investing. Please referwww.birlasunlife.com for further details.

Risk Factors


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