NFO Alert: Gold ETF FoF by Zerodha Mutual Fund:There is an old tradition in our country of buying gold on the occasion of Dhanteras and Diwali. In such a situation, Zerodha Mutual Fund has launched a new fund offer (NFO) of Gold ETF FoF (Fund of Funds) just before Diwali and Dhanteras. Subscription in this scheme is open from 25 October to 8 November. The objective of this scheme, launched in the festive season, is to achieve capital growth by investing in gold ETFs. Let us know the main points of this fund. So the question is whether you should invest in it.
What is the specialty of Zerodha’s Gold ETF FoF?
Zerodha Mutual Fund’s Gold ETF FoF is an open-ended fund that invests in Gold Exchange Traded Funds i.e. ETFs. This means that this fund does not invest directly in gold, but invests in ETFs that invest in gold. This fund invests for the purpose of capital growth in the long term. It is benchmarked with the domestic price of physical gold.
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NFOimportant things related to
– NFO opening date: 25 October 2024
– NFO closing date: 8 November 2024
– Minimum investment: Rs 500
– Minimum monthly SIP: Rs 500 (starting from one installment)
– Total Expense Ratio: Up to a maximum of 1% (maximum possible ratio under rules)
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Investment method and strategy
Under this scheme, 95-100% of the funds received from investors will be invested in Gold ETFs and the remaining 0-5% will be invested in debt securities and money market instruments. This is a scheme based on a passive investment strategy, in which investment in gold ETFs is maintained, irrespective of the gold prices.
Gold ETF FoFWhy invest in NFO
– Easy investment in Gold:This NFO is for those investors who want to invest in gold but do not want to invest in physical gold due to security and storage concerns.
– Protection against inflation:Gold is considered a safe investment, especially in times of inflation. This fund can help you deal with inflation.
– Diversification of portfolio: Since gold has less correlation with equities, it can reduce the volatility of your portfolio.
– Investment through SIP: You can also invest in this NFO through SIP, which gradually makes it easier to invest in gold.
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NFORisk factors associated with
– Gold prices may fluctuate. This volatility is higher in the short term, so plan your investment for the long term.
Investing in gold can benefit you in the long term, but there may be some ups and downs in the short term.
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Should you invest in this NFO?
This NFO can be the right option for those who want capital growth in the long term and want to invest in gold through Gold ETFs. Gold is seen as a safe asset and its fluctuations are generally lower than equities. In such a situation, it can be considered as an investment that increases stability in the portfolio of investors. That is, if you are planning to invest in gold on Dhanteras and want long term capital growth, then you can consider investing in Zerodha Mutual Fund’s Gold ETF FoF. But it is worth noting that the risk level of this scheme is ‘high’. That means, only those investors who are ready to take this much risk should invest in this scheme.
(Disclaimer: The purpose of this article is only to provide information, not to give investment advice. Take any investment decision only after taking the advice of your investment advisor.)
