Mirae Asset Mutual Fund has launched its first commodity exchange-traded fund (ETF), Mirae Asset Gold ETF, an open-ended scheme replicating the domestic gold price.
The new fund offer (NFO) will open on February 9 and close on February 15. The allotment and first net asset value (NAV) dates are February 20 and 21, respectively, while listing on the stock exchanges would be done within five working days from the allotment date.
After listing on the stock exchanges, investors can buy or sell units of the ETF from February 21, 2023, onwards.
Detailing the scheme, Siddharth Srivastava, head of ETF product at Mirae Asset Mutual Fund, in a press release, said, “Historically, gold has increased the risk-adjusted returns in a portfolio during economic downturns. Gold retains its purchasing power when the cost of goods rises, as gold has performed historically well during inflation. In the current volatile market environment, investing in Gold ETF seems to be a reasonable option for portfolios from a long-term point of view”.
During the NFO, the minimum investment amount in the ETF is Rs 5,000 or any quantum above that in multiples of Re 1.
The fund house said it would consider inflation and central bank policy rate hikes as the key gold drivers in 2023. It believes that the “external global dynamics” has created many challenges for domestic and global economic growth, making gold a relatively safe haven for investors and a critical component of asset allocation.
Srivastava explained the ETF would track the physical gold prices in the domestic market, and each unit would be roughly 0.01 grams of gold.
Why Invest In Gold ETF
• A low-cost and easy option to take exposure in gold as it provides the ease of buying and selling on the exchanges, just like stocks.
• There is no risk of theft as gold ETFs are held in investors' demat accounts, and there is zero risk of divergence in gold purity.
• Transparent pricing and liquidity during buying and selling of gold ETF.
• One can invest as low as 1 unit representing approximately 0.01 gold gram.
• Gold is a reliable asset class at all times, creating long-term wealth.
• A low correlation between gold and other asset classes helps in diversification.
• Gold could act as a hedge against inflation and economic turmoil.
