ETF Gold (GLD)

What is GLD?

 

GLD is a type of Gold ETF which is based on the price of foreign gold funds. It is listed on Stock Exchange of Thailand.

 

How to Trade GLD

Since GLD is listed on the stock market, investors who have opened investment portfolios with brokers could trade the fund immediately. The trading procedure and fees are similar to stock trade. The investors could place bid and offer through brokers for the desired board lot. 

How is GLD different from other types of gold investment?


 

Gold Bar

“GLD”

Other Gold Funds

Price List/
Paid Price

Regularly displayed in front of gold shops
(know the price beforehand)

Real Time throughout the day on display boards (know the price beforehand)

Once a day through NAV on the trading day (do not know the price beforehand)

Trading Hour


Gold shops’ business hours


The stock market’s trading hours

There is a cutoff time for placing trade orders as indicated by the asset management firm.

Holiday

Gold shops’ holidays

Stock Exchange of Thailand’s holidays

The funds’ holidays (Thailand and international holidays) as indicated on the prospectus

Return

Gold Spot price+ currency exchange rate

Gold Spot price + currency exchange rate   

Gold Spot price +  currency exchange rate (depends on the fund’s risk management policy in regard to the exchange rate)

Fluctuation/
Risk

-  Gold Spot price
-  Currency exchange rate

-  Gold Spot price
-  Currency exchange rate

- Gold Spot price
- Currency exchange rate (depends on the fund’s risk management policy in regard to the exchange rate)

Fees

- Difference in trade price, the minimum of 100 baht per one baht weight gold (about 0.47% of the trade price)

- A commission fee not exceeding 0.2578% of the trade value

 

- Annual Fee
Not exceeding 0.46% per annum of the fund’s total assets value (excluding value-added tax and the fund’s expenses incurred abroad)

Depends on the trade fees indicated in the prospectus (excluding fund’s expenses incurred abroad)

Gold Bullion Storage

Gold bullions: home/rental bank safe deposit box
 

Gold voucher: gold shop

The secure vault at HSBC, England

As indicated in the prospectus booklets

Gold Quality

Minimum purity of 96.50%

Minimum purity of 99.50%

Minimum purity of 99.50%

Minimum Trade Value

5 baht weight
(or about 100,000 Baht)
Minimum of 100 units
(about 200 Baht)
2,000 Baht for KT-Gold Fund by KTAM or as indicated in the prospectus booklets

What is iNAV price?

Generally, for open-end funds, the appropriate trade price is NAV per unit which announced once at the end of the fund’s trading days. However since GLD is traded throughout the trading day, iNAV or indicative NAV is introduced as tool to help investors make decision (NAV calculates the price movement throughout the day).

 

 

How iNAV price of ETF is calculated?

iNAV is calculated from


1. NAV price from the end of the previous trading day

2. The changes in price of The SPDR GOLD Trust (main mutual fund) during the day

3. The changes in exchange rates between THB/HKD


For instance, if the ETF price for Day 1 is closed at 10 baht, the INAV price of Day 2 will change by 10 baht+(percentage rate of change in the main mutual fund’s price)+(percentage rate on change in currency exchange rate)
 

*Note: iNAV price is based on THB/HKD exchange rates and the main mutual fund’s trade price on Hong Kong Stock Exchange from 8:30-11:00 and 12:30-15:00 (Thailand’s time). The price of the main mutual will not change outside these periods, including Hong Kong Stock Exchange’s holidays.

How frequent the iNAv price is updated?

The company updates iNAV price every 15 second.

Why GLD price changes are different from the general gold shop?

Due to some factors, the trade prices are different from iNAV prices during some periods, causing the investors to sell at higher prices than iNAV (premium) and receive lower returns than from the gold funds abroad (including the exchange rate) if the transaction took place while the market premium is decreasing.


On contrary, if the investors are buying when the price is lower than iNAV (discount), they will receive higher returns than from the gold funds abroad (including the exchange rate) if the transaction took place while the market discount is decreasing.

 

 


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