by NR INDRAN / INT

Mumbai : On the auspicious occasion of Dhanteras, the National Stock Exchange [NSE], today, recorded a volume of Rs 636.04 crore in gold exchange traded funds (ETFs) and the number of units traded stood at 24.61 lakh when the market closed at 8.00pm, recording the highest ever on a single day. The number of clients who have traded in gold etfs stood at 68224 as against 17998 last year. Volumes in gold etf’s have been showing high growth in the last three years and have shown an impressive growth in the run up to Dhanteras this year as well.

Dhanteras is considered to be the most auspicious occasion to buy gold. In a bid to allow investors to invest after office hours and take maximum advantage of this auspicious day, NSE and BSE have extended their trading hours upto 8.00 pm instead of the regular 3.30 pm. As a special incentive for the investors, NSE also waived off the transaction charges for trading in Gold ETF for this day.

Gold ETFs have many other practical advantages: easy to store, no fear of theft because they are in demat form, no depreciation when you sell the units, can be bought in units of as low as one gram or even half a gram.  While buying physical gold, an investor is at the complete mercy of the jeweler on pricing, but in an ETF, the underlying gold price is the same– the only thing that differs marginally is the AMC’s charge. There is no risk in the transaction either, because the exchange is doing the risk management.

Statistics show that the assets under management (AUMs) for Gold ETFs have also witnessed a jump of 114% year-on-year and over 507% in two years. AUMs grew from Rs 1008 crore in Sept 2009 to Rs 2850 crore in Sept 2010 to Rs 6119 crore at the end of July 2011(As per the AMFI data, the last available for July).

There has also been a consistent rise in the number of investors and daily traded volumes in Gold ETF’s on the National Stock Exchange. In the last 6 months, from April to September 2011, daily average trading values in Gold ETFs have increased by a whopping 400% from a daily average of Rs. 18 crores in April to Rs.92 crores in September 2011. The Daily average number of trades has also increased by 300% during this period, from 5891 average daily trades in April to 23874 in September 2011.

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