Motilal Oswal MF to launch gold and silver ETFs fund of funds

NEW DELHI: Motilal Oswal Asset Management Company Ltd. is scheduled to launch a scheme that offers exposure to gold and silver via a single fund later this month.

The new fund offer (NFO) for Motilal Oswal Gold and Silver ETFs Fund of Funds (FoF) will open from 26 September to 7 October. The fund manager of the scheme is Abhiroop Mukherjee. There will be an exit load of 1% if units are redeemed on or before 15 days from the date of allotment.

As per the scheme document, the fund of funds (FoFs) will look to deliver returns that correspond to the performance of the underlying schemes of gold exchange-traded fund (ETF) and silver ETF.

Since Motilal Oswal MF doesn’t have its own silver or gold ETF, the scheme will invest in units of other fund houses.

For gold, the AMC highlighted schemes such as ICICI Prudential Gold ETF, Nippon India ETF Gold BeES, SBI-ETF Gold and Kotak Gold ETF and HDFC Gold Exchange Traded Fund.

For silver, it mentioned ICICI Prudential Silver ETF, Nippon India Silver ETF and Aditya Birla Sun Life Silver ETF.

Apart from the above-mentioned gold ETFs and silver ETFs, the scheme may invest in units of ETFs having similar investment objective, investment strategy and asset allocation etc.

Further, the document mentioned that during the NFO period, the fund manager will invest approximately 70% of the NFO collection in gold and 30% in silver by way of investing in respective ETF/s tracking the commodities.

Moreover, allocation towards gold and silver ETFs would be reviewed on a quarterly basis and the maximum weight of either gold or silver has been capped at 90%.

Notably, India’s first gold fund, Nippon India ETF Gold BeES, was launched in March 2007, while silver-based mutual funds were first introduced in January this year.

The Securities and Exchange Board of India (Sebi) had in September 2021 allowed mutual fund houses to introduce silver ETFs in the Indian market. ICICI Prudential Silver ETF was the first silver-based fund in India.

Edelweiss Mutual Fund had launched launch India’s first scheme offering exposure to both silver and gold via a single fund last month.