iCharts Discussions

trendy · White Belt Joined: 16 Oct 2006 Posts: 40

53% diff in increase between Gold futures and Goldbees.
Is this fooling ETF investors or are we missing something?

prst · White Belt Joined: 24 Sep 2011 Posts: 87

I THINK there is mistake in your calculations.
gold future, % increase is 41%.
gold bees, % increase is 28%.
I dont think that is too much difference.
u should also consider the risks involved in futures and options.
bees is safer and can be held for any length of time.

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

one of the biggest scams worldwide is that gold ETFs are not secured by equal amount of solid gold, which is actually mandatory.

opportunist · White Belt Joined: 27 Apr 2010 Posts: 356

trendy · White Belt Joined: 16 Oct 2006 Posts: 40

pkholla · Black Belt Joined: 04 Nov 2010 Posts: 2890

Friends: Please distinguish between
1) Newspaper/ website listed price of gold in 22c, 24c etc
2) Physical gold coin, ingot, jewelry
3) Regular gold funds like SBIGETS, GOLD BEES, RELGOLD they buy gold, keep in vaults and issue shares = 1 gm each
4) Fund of fund: They invest in other Gold ETFs and issue you shares!
5) Fund which invests in gold mines world wide (I dont think any India mine is publicly listed) These funds also suffer or gain thru $-Re rate fluctuation

I suggest you compare investments within each class only as there is different risk, return etc ( as suggested by someone else). Even comparing to newspaper listed price may not be correct as that price may not actually be seen when you buy/ sell!

Eg: gold coins are issued by Reliance, PSBs, Private Banks, Bangalore Refinery etc : compare them

( eg: I have always invested in virtual gold ONLY thru SBIGETS. This trades at a premium to remaining similar ETFs as PUBLIC PERCEPTION IS THAT THERE IS LEAST GOLMAAL in running this fund)

Jai Hind, Prakash Holla

amexhui · White Belt Joined: 26 May 2009 Posts: 45

The issue mentioned by OP is also a function of what Vinay28 mentioned below.

The very reason all these gold ETFs and other substitutes get people's investment is because of the blind faith reposed by the public. As a matter of fact, the returns between the two methods should have been comparable. 13% difference in 2 months is MASSIVE by any standards.

I cannot comment on the gold ETFs in India, but the ones in the US do not have any audits for checking if the gold bar holdings are numbered and correctly allocated to the investors. It really will not be a surprise if all the so called gold holdings of these ETFs disappear one fine day a la the goldfinger plan from a james bond movie.