arjungoyal12
KF Mentor
Zerodha Mutual Fund has unveiled its latest offering, the Zerodha Gold ETF, adding a new dimension to the realm of mutual fund investments. This open-ended exchange-traded fund, launched on February 16, 2024, aims to replicate and track the domestic prices of gold, providing investors with an opportunity to capitalise on the long-term potential of this precious metal. Let's look into the specs of this new fund and explore whether it might be a valuable addition to your investment portfolio.
Understanding Zerodha Gold ETF
The objective of the Scheme:
The primary objective of the Zerodha Gold ETF is to generate returns corresponding to the domestic price of gold before expenses. By investing in physical gold and gold-related instruments as specified by SEBI, the scheme seeks to offer investors a way to participate in the potential appreciation of gold over time. It's important to note that the performance of the scheme will be subject to tracking errors, fees, and expenses.
Investment Criteria:
Investors can participate in this scheme with a minimum investment of ₹500 per plan/option, with no upper limit for investment. The allocation of funds under normal circumstances will be predominantly in physical gold and gold-related instruments (95% to 100%), categorised as having a moderate to high-risk profile. A smaller allocation (0% to 5%) will be directed towards debt and money market instruments, cash, and cash equivalents, with a low to moderate risk profile.
Benchmarking and Performance
Benchmark:
The benchmark for the scheme is set as the domestic prices of physical gold. Performance comparisons will be made against this benchmark. However, investors should be aware that due to inherent differences in portfolio construction, the scheme's performance may not be strictly comparable with that of the benchmark.
Comparison with Peer Funds:
Several other asset management companies have launched gold exchange-traded funds, offering investors returns corresponding to the total returns of specific gold indices. As of February 16, 2024, here are some key peer funds and their 10-year returns:
Risk Profile:
The Zerodha Gold ETF is categorised as a high-risk investment. Investors need to understand that their principal is subject to high risk, and it's advisable to consult financial advisors to determine suitability.
Entry and Exit Loads:
The scheme involves no entry load, providing investors with a cost-effective way to enter. The exit load is also nil, offering flexibility in terms of redeeming investments. However, it's crucial to stay informed, as the AMC reserves the right to revise the load structure.
Conclusion
Zerodha Gold ETF presents a unique opportunity for investors seeking exposure to the performance of gold without the complexities associated with physical ownership. As with any investment, it comes with its set of risks, and investors should carefully consider their risk tolerance and financial goals. For those looking to diversify their portfolio and tap into the potential of gold, Zerodha Gold ETF could be a compelling choice. However, due diligence and consultation with financial experts are crucial steps before making any investment decisions.
Understanding Zerodha Gold ETF
The objective of the Scheme:
The primary objective of the Zerodha Gold ETF is to generate returns corresponding to the domestic price of gold before expenses. By investing in physical gold and gold-related instruments as specified by SEBI, the scheme seeks to offer investors a way to participate in the potential appreciation of gold over time. It's important to note that the performance of the scheme will be subject to tracking errors, fees, and expenses.
Investment Criteria:
Investors can participate in this scheme with a minimum investment of ₹500 per plan/option, with no upper limit for investment. The allocation of funds under normal circumstances will be predominantly in physical gold and gold-related instruments (95% to 100%), categorised as having a moderate to high-risk profile. A smaller allocation (0% to 5%) will be directed towards debt and money market instruments, cash, and cash equivalents, with a low to moderate risk profile.
Benchmarking and Performance
Benchmark:
The benchmark for the scheme is set as the domestic prices of physical gold. Performance comparisons will be made against this benchmark. However, investors should be aware that due to inherent differences in portfolio construction, the scheme's performance may not be strictly comparable with that of the benchmark.
Comparison with Peer Funds:
Several other asset management companies have launched gold exchange-traded funds, offering investors returns corresponding to the total returns of specific gold indices. As of February 16, 2024, here are some key peer funds and their 10-year returns:
- Axis Gold ETF: 5.80%
- Nippon Gold ETF: 5.80%
- SBI Gold ETF: 6.02%
- Invesco India Gold ETF: 5.86%
- HDFC Gold ETF: 6.02%
- Aditya Birla Sun Life Gold ETF: 6.12%
- Kotak Gold ETF: 6.13%
Risk Profile:
The Zerodha Gold ETF is categorised as a high-risk investment. Investors need to understand that their principal is subject to high risk, and it's advisable to consult financial advisors to determine suitability.
Entry and Exit Loads:
The scheme involves no entry load, providing investors with a cost-effective way to enter. The exit load is also nil, offering flexibility in terms of redeeming investments. However, it's crucial to stay informed, as the AMC reserves the right to revise the load structure.
Conclusion
Zerodha Gold ETF presents a unique opportunity for investors seeking exposure to the performance of gold without the complexities associated with physical ownership. As with any investment, it comes with its set of risks, and investors should carefully consider their risk tolerance and financial goals. For those looking to diversify their portfolio and tap into the potential of gold, Zerodha Gold ETF could be a compelling choice. However, due diligence and consultation with financial experts are crucial steps before making any investment decisions.
