Motilal Oswal Asset Management Company (MOAMC) has launched Motilal Oswal Gold and Silver ETFs Fund of Funds (FoFs), with an objective to generate returns by investing in units of Gold ETF and Silver ETF.
In a statement, the AMC said the scheme will generate returns by investing in units of Gold and Silver ETF. The daily weights shall be market driven with the starting (NFO) allocation of 70:30. The maximum weight is capped at 90%, subject to quarterly review. The initial higher allocation to Gold is on account of it having higher economic value and being highly liquid. Additionally, it is relatively more stable as compared to silver.
“Gold and silver have been preferred assets for Indian households for ages. These precious metals had been acquired and kept in their physical forms. However, we are witnessing high inflation around the world. Central banks across have resorted to rate hikes and neutral system liquidity to tackle the runaway inflation. Gold is a hedge against inflation, protects against the erosion of wealth, and acts as a store of value in such times,” Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd said.
“Even, the world’s elite turn to precious metals to protect their fortunes, as both metals never lose their value. Apart from investment, jewellery & silverware, Silver has major industrial applications including green technologies. We are at an interesting juncture as the advanced economies of the US and Europe are at risk of slipping into a recession whereas India is showing very growth prospects,” he added.
Pratik Oswal, President – Passive Business, MOAMC said, “With an objective to bring new investment opportunities, Motilal Oswal AMC has launched the Gold and Silver ETFs FOFs. This offers a huge diversification mix as both Gold and Silver have a low correlation to equities and thus act as a good diversifier. Both metals offer good downside protection and tend to outperform in bear markets. While Silver tends to outperform when the market is recovering from a bear phase. With this scheme, the investors will be able to mitigate risks against the market volatility while enjoying the portable wealth and rising economic values.”
The NFO will open on 26th September 2022 and closes on 7th October 2022. The Minimum Application amount for Motilal Oswal Gold & Silver ETFs FOFs is Rs. 500 and in multiples of Re. 1 thereafter.
Indicative Base Total Expense Ratio of the funds: Regular – 0.50%, Direct – 0.15%. The date of allocation will be 13th October 2022, the AMC said.
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