Mutual and other Funds

7. Explain the guideliness that the Gold Exchange Traded Funds (GETFs) follow.

Ans: For GETF, the assets of the scheme have to be kept in the custody of a bank , which is registered with SEBI. However , the scheme is subject to certain investment restrictions. The Funds of any such scheme should be invested only in gold or gold -related instruments, in accordance with the investment objective , except to the extent necessary to meet the liquidity requirement for honoring redemptions or repurchase of units as disclosed in the Offer Document. Since physical gold and other permitted instruments linked to gold are denominated in gold tonnage , it will be valued based on the market price of gold in the domestic market and will be marked to market on a daily basis.