Tata Mutual Fund has introduced the Tata Gold Exchange Traded Fund, an open-ended exchange-traded fund designed to replicate and track the domestic prices of gold. The scheme opened for public subscription on January 2, 2024, and will remain open until January 9, 2024, with subsequent re-opening for continuous sale and repurchase by January 17, 2024.
### Mutual Fund Scheme Type:
This scheme falls under the category of an open-ended exchange-traded fund, specifically aiming to mimic the performance of physical gold in domestic prices, subject to tracking error. However, there is no guarantee that the scheme will achieve its investment objective.
### Investment Objective:
The primary objective of investing in this fund is to generate returns in tandem with the performance of physical gold in domestic prices. It is essential to note that while the scheme aims to achieve this objective, there is no assurance or guarantee of its success.
### Investment Process:
Investors can participate in this scheme with a minimum investment of ₹100 per plan/option, and subsequent investments can be made in multiples of Re 1. There is no upper limit for investment.
### Asset Allocation:
Under normal circumstances, the scheme’s asset allocation is expected to be as follows:
– Gold (Includes Physical Gold and other Gold-related instruments): 95% to 100% (High Risk)
– Debt & Money Market Instruments, including units of Mutual Funds: 0% to 5% (Medium Risk)
### Benchmarking Performance:
The performance of the scheme will be benchmarked against the domestic price of gold.
### Comparison with Similar Mutual Funds:
Several other Asset Management Companies (AMCs) have launched similar gold exchange-traded funds, offering returns corresponding to the total returns of specific indices. Some of these include Axis Gold ETF, Nippon Gold ETF, SBI Gold ETF, Invesco India Gold ETF, HDFC Gold Exchange Traded Fund, and others.
### Entry and Exit Loads:
The scheme imposes no “Entry Load,” meaning investors are not required to pay any fees while investing. Similarly, there is a “Nil” exit load. However, the Asset Management Company (AMC) reserves the right to revise the load structure, with any changes becoming effective prospectively.
### Fund Manager:
Tapan Patel will manage the investments in this scheme.
### Risk Profile:
The scheme is categorized as “High Risk,” and investors should be aware that their principal is subject to high risk. It is recommended for investors who understand and are willing to tolerate high-risk levels. Consulting with financial advisors is advisable if there are doubts about the suitability of the product for specific investors.
