Motilal Oswal Asset Management Company (MOAMC) has announced the launch of Motilal Oswal Gold and Silver ETFs FoFs, with an objective to generate returns by investing in units of Gold ETF and Silver ETF. This new fund offer (NFO) will open for subscription on September 26, 2022 and close on October 7, 2022.

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The indicative base total expense ratio of the funds are regular – 0.50 percent, direct – 0.15 percent. The date of allocation will be October 13, 2022.

About the fund

The scheme will 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 maximum weight is capped at 90 percent, subject to quarterly

review. The initial higher allocation to gold is on account of it having higher economic value and being highly liquid, according to Motilal Oswal.

Additionally, it is relatively more stable as compared to silver.

Fund allocation

The minimum application amount for Motilal Oswal gold and silver ETFs FOFs is Rs 500 and in multiples of Re 1 thereafter. On ongoing basis investor can purchase/redeem units of the scheme through financial advisor or by login to www.motilaloswalmf.com.

Further, the minimum application amount for ETF FOFs is Rs 500 and in multiples of Re 1 thereafter.

Why should one consider adding gold and silver in the portfolio?

According to Motilal Oswal, gold is extensive used in jewelry and is often considered as ‘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.

Hence, exposure to both metals help portfolio do well in both turbulent times and during recovery periods.

Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd said, “Gold and silver have been preferred assets for Indian house holds for ages. These precious metals had been acquired and kept in the 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. Apart from investment, jewelry nd silverware, Silver has major industrial applications including green technologies.”

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 will be able to mitigate risks against the market volatility while enjoying the portable wealth and rising economic values.”

(Edited by : Anshul)

First Published:Sept 23, 2022 12:15 PM IST