Get a load of the GETF lode

Kathmandu, November 6:

It’s yellow, but never goes mellow. Good old gold has always been a hot potato for Nepalis, mostly for ornaments and as insurance against that rainy day. But now, there is one more way to go golden — Gold Exchange Traded Fund (GETF).

Ace Development Bank (Ace) has introduced GETF — an innovative product. “GETF is paper gold, easy to trade and incurs no risk in storage,” said chief executive officer (CEO) of the bank, Siddhant Raj Pandey.

GETF — expected to address issues of higher prices, purity, costs of insurance, storage and liquidity associated with investing in tangible gold — is a much-awaited development in the domestic financial market.

“A certificate of ownership can be held by gold investors, instead of storing actual metal,” Pandey said adding GETF lets investors to buy or sell without inconveniences associated with transfer of actual tangible gold.

Investment in the precious yellow metal is always considered as a cushion against losses in other asset classes. “Investment in GETF will be the perfect hedge against inflation.

In the paper gold concept there is no question about purity factor nor do the investors have to worry about storage and hence making the holding a safe bet,” he said.

It is widely accepted that the greatest cost in owning gold in a portfolio for long term

is not the buying or selling costs but the holding cost.

“On the first day today, Ace sold five kg of gold through ETF certificates,” Pramod Pandeya, Ace’s compliance department head said.

GETF can be traded like shares also. “It will be traded on Ace Trading Floor — the

secondary market — from November 9,” CEO Pandey said, adding that it was most suitable for those wishing to speculate in the short term. “This is because the price of the ETF is pegged to the international price of gold.”

A customer can buy new ETF in the primary market from Ace everyday during banking hours. However, one can also trade on the Ace trading floor — in the secondary market — from 3:30 pm to 4:30 pm from Sundays to Thursdays only.