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Business News/ Mutual Funds / NFO Alert: Zerodha Fund House launches Zerodha Gold ETF; all you need to know
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NFO Alert: Zerodha Fund House launches Zerodha Gold ETF; all you need to know

Zerodha Fund House announced the launch of the Zerodha Gold ETF. The scheme opened for public subscription on February 16, 2024, and will close on February 21, 2024.

Zerodha Fund House launches Zerodha Gold ETF as a part of its new fund offers.Premium
Zerodha Fund House launches Zerodha Gold ETF as a part of its new fund offers.

Zerodha Fund House announced the launch of the Zerodha Gold ETF. The scheme opened for public subscription on February 16, 2024, and will close on February 21, 2024. The scheme re-opens for continuous sale and repurchase within five days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended exchange-traded fund replicating/tracking the domestic prices of gold. This product is suitable for investors seeking

  • Long-term capital appreciation.
  • Investment in gold to generate returns similar to the performance of the gold, subject to tracking errors.

What is the main objective of investing in this fund?

The investment objective of the scheme is to generate returns corresponding to the domestic price of gold before expenses, subject to tracking errors, fees and expenses by investing in physical gold.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of 500 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Instruments

Indicative allocations

(% of total assets)

Risk Profile

Physical gold & gold related instruments as may be specified by SEBI

95% to 100%

Moderate to High

Debt and Money Market Instruments, cash and cash equivalents.

0% to 5%

Low to Moderate

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such gold exchange-traded funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

Name of the fund

10-year returns (in %)

Axis Gold ETF

5.80

Nippon Gold ETF

5.80

SBI Gold ETF

6.02

IDBI Gold Exchange Traded Fund

-

ICICI Prudential Gold ETF

-

Invesco India Gold ETF

5.86

Kotak Gold ETF

6.13

HDFC Gold Exchange Traded Fund

6.02

UTI Gold Exchange Traded Fund

-

Aditya Birla Sun Life Gold ETF

6.12

SBI- ETF Gold

-

Canara Robeco Gold Exchange Traded Fund

-

Edelweiss Gold ETF

-

Source: AMFI (As of February 16, 2024)

How will the scheme benchmark its performance?

The benchmark for the scheme is the domestic prices of physical gold. Performance comparisons for the scheme will be made vis-à-vis the benchmark. However, the scheme’s performance may not be strictly comparable with the performance of the benchmark, due to the inherent differences in the construction of the portfolio.

The Trustee reserves the right to change the benchmark for evaluation of the performance of the scheme from time to time in conformity with the investment objectives and appropriateness of the benchmark subject to SEBI (MF) Regulations, and other prevailing guidelines, if any by suitable notification to investors to this effect.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load", which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load" would also be “Nil". 

The AMC reserves the right to revise the load structure from time to time. Such changes will become effective prospectively from the date such changes are incorporated.

Who will manage this scheme?

Shyam Agarwal would be looking after investments in this scheme.

Does the fund contain any inherent risk?

The scheme involves “High Risk" as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

 

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Published: 17 Feb 2024, 10:46 AM IST
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