UTI gold fund draws 26,000 investors

The new fund offer of UTI Mutual Fund's gold exchange traded fund (ETF) has received overwhelming response from investors across the country.

The new fund offer (NFO) has raised nearly Rs 250 crore from about 26,000 investors, perhaps the biggest number of investors for an NFO.

UTI's Gold ETF, to be known as `Gold Share', is the second ETF to hit the market after Benchmark's Gold BeES.

"We have received good response and our pan-India network has helped us in marketing the product in rural areas," said an official of UTI MF.

"We will be listing on the NSE by the third week of April," he said. The minimum subscription for the scheme was Rs 20,000,while its was Rs 10,000 for Benchmark's gold ETF.

Other mutual funds that have also lined up to launch their gold ETF schemes include Reliance Mutual Fund, Tata MF, Escorts and ICICI-Prudential Mutual Fund.

At present, India accounts for 23 per cent of the world's jewellery demand and around 35 per cent of global investment in gold comes from the country.

The gold Benchmark Exchange Traded Scheme made its debut last month on the NSE at Rs 1,000 a unit.

One unit of the exchange traded fund scheme is equivalent to one gram of gold. Gold ETF is intended to offer investors a means to participate in the gold bullion market without taking physical delivery of gold and to buy and sell on the NSE.

The performance of the scheme may differ from that of the domestic prices of gold owing to expenses and certain other factors.