After launching gold exchange-traded funds (ETFs), mutual funds (MFs) are getting ready to launch schemes that would invest in not just gold, but also equity and debt, all in one.
At present, there is only one scheme, UTI Wealth Builder Fund-Series II (UWB), that invests in equity and debt securities, in addition to gold.
At least four fund houses have filed the draft offer documents of their schemes with the capital market regulator, the Securities and Exchange Board of India (Sebi).
While Axis Triple Advantage Fund (ATA) will invest up to 40% each in equity and debt securities, it will also aim to invest between 20% and 30% in gold ETFs.
Religare Gold Monthly Income Plan looks like just another monthly income plan as it aims to invest 65- 90% in debt. The remaining portion, though, will be invested in a mix of gold ETFs and equity scrips.
While Sundaram BNP Paribas Gold Fund is an umbrella fund with three schemes underneath (each would invest differently; from investing at least 65% in equities to one that is a fund-of-funds scheme investing only in gold ETFs), Canara Robeco Indigo (CRI) aims to invest in a mix of gold ETFs and debt securities.
As ETFs do not offer much differentiation, fund houses are now gearing to launch schemes that move around the yellow metal’s glitter and yet look and behave differently. Once these schemes tap the market, it’ll be mandatory to read their offer documents to understand in what way and how much would they be investing in gold.
For instance, UWB is an equity fund as it invests at least 65% in equity instruments, but ATA aims to be a debt fund as it won’t invest more than 40% in equities. Further, CRI aims to avoid equities and stick to only debt and gold.