Motilal Oswal Asset Management Company (MOAMC) launched Motilal Oswal Gold and Silver ETFs FoFs on September 22.
The brokerage firm underscored that the investment in precious metals is an ideal way to ward off the risk of inflation, recession and market uncertainty.
The new fund offer (NFO) will open on September 26 and close on October 7, 2022. The date of allocation is October 13, 2022.
The scheme shall generate returns by investing in units of Gold and Silver ETFs; the daily weights shall be market driven with the starting (NFO) allocation of 70:30, the asset management company said.
The maximum weight is capped at 90%, subject to quarterly review. The initial higher allocation to gold is because it has higher economic value and is highly liquid.
"Gold is extensively used in jewellery and is often considered a ‘safe haven, as it tends to do well during market uncertainty. In contrast, silver has wide industrial applications and generally does well during business recovery periods. Exposure to both metals helps portfolio do well in both turbulent times and during recovery periods." said the company.
“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," said Navin Agarwal, MD & CEO of Motilal Oswal Asset Management Company.
“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,” Agarwal added.
Pratik Oswal, President - Passive Business, Motilal Oswal Asset Management Company Ltd 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 can mitigate risks against the market volatility while enjoying the portable wealth and rising economic values.”
The Minimum Application amount for Motilal Oswal Gold & Silver ETFs FOFs is ₹500 and in multiples of ₹1 thereafter.