DSP Mutual Fund announced the launch of the DSP Gold ETF, an open-ended scheme that seeks to generate returns that are in line with the performance of physical gold in domestic prices, subject to tracking error.
The scheme opened for public subscription on April 17, 2023, and will close on April 24, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
Q. What kind of mutual fund scheme is this?
This is an open-ended exchange-traded fund replicating/ tracking domestic prices of gold.
Q. What is the main objective of investing in this fund?
The scheme seeks to generate returns that are in line with the performance of physical gold in domestic prices, subject to tracking error. There is no assurance that the investment objective of the Scheme will be realized
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹5000 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:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
| Minimum | Minimum | ||
| Gold and Gold Related Instruments | 95% | 100% | Moderate Risk to High Risk |
| Cash and Cash Equivalents | 0% | 5% | Low Risk to Moderate Risk |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such gold exchange-traded funds (ETFs), thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
| Mutual Fund House | Gold ETF |
| HDFC Mutual Fund | HDFC Gold ETF |
| SBI Mutual Fund | SBI Gold ETF |
| IDBI Mutual Fund | IDBI Gold ETF |
| Axis Mutual Fund | Axis Gold ETF |
| Kotak Mahindra Mutual Fund | Kotak Gold ETF |
| Aditya Birla Sun Life Mutual Fund | Aditya Birla Sun Life Gold ETF |
| Nippon India Mutual Fund | Nippon India Gold ETF |
| Invesco Mutual Fund | Invesco India Gold ETF |
| Quantum Mutual Fund | Quantum Gold ETF |
| UTI Mutual Fund | UTI Gold ETF |
| Source: Groww.in | |
Q. How will the scheme benchmark its performance?
The performance of the scheme will be benchmarked against the domestic price of physical gold (based on the London Bullion Market Association (LBMA) gold daily spot fixing price). The trustees reserve the right to change the benchmark in the future if a benchmark better suited to the investment objective of the scheme is available subject to compliance with SEBI (MF) Regulations, and other prevailing guidelines, if any.
Q. 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” is also “Nil”.
Q. Who will manage this scheme?
Ravi Gehani is the designated fund manager of this scheme.
Q. 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 only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
