NFO Alert: All you need to know about newly launched DSP Gold ETF Fund of Fund

The scheme opened for public subscription on November 03, 2023, and will close on November 10, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of mutual fund scheme is this?

This open-ended Fund of Fund scheme is suitable for investors seeking

• Long-term capital growth
• Investments in units of DSP Gold ETF which in turn invests in physical gold

What is the main objective of investing in this fund?

The primary investment objective of the scheme is to generate returns by investing in units of DSP Gold ETF. There is no assurance that the investment objective of the scheme will be realised.

“Gold is a great addition to a typical equity – debt-heavy portfolio due to the low correlation to these asset classes. The scheme structure presents a convenient way to diversify your portfolio and systematically accumulate gold, automatically adding depth and multi-dimensionality to your investments,” says Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Mutual Fund.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹100 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:

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such gold ETF fund of funds. Most of these funds are not too old, which means that investors can assess them only by their recent performance. These include:

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked against the domestic price of physical gold (based on London Bullion Market Association (LBMA) gold daily spot fixing price). Since the scheme would primarily invest in DSP Gold ETF, which in turn invests in physical gold, the aforesaid benchmark is most suitable for comparing the performance of the scheme. 

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”. 

Who will manage this scheme?

Anil Ghelani and Dipesh Shah are the designated fund managers of 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. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

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Updated: 03 Nov 2023, 05:33 PM IST