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Union Gold ETF is an open-ended scheme replicating/tracking domestic price of gold. Units will be listed on both the stock exchanges (NSE and BSE) within five business days of allotment, allowing investors to trade them like any other stock. No exit load is applicable.
Union Gold ETF Fund of Fund (FoF) is an open-ended fund of fund scheme that will invest in units of Union Gold ETF, offering indirect exposure to gold.
The scheme carries an exit load of 1% if units are redeemed within one year. Both schemes will be managed by Vinod Malviya.The benchmark for both schemes is the domestic price of physical gold. Investors can invest a minimum of Rs 1,000 and in multiples of Re 1 thereafter during the NFO period.The launch of these NFOs comes at a time when global economic conditions pose challenges to growth. Historically, gold has played a key role in portfolio diversification due to its low correlation with other asset classes and potential as a hedge against inflation. Central banks globally have been significant buyers of gold, further supporting its demand and price, according to the press release by the fund house.
The key benefits of these NFOs include cost-effective, exposure to gold without making charges or storage risks, units backed by gold of specified purity, easy to buy, sell, or redeem units like any other open-ended mutual fund/ exchange traded fund, and no theft risk as the gold is held in Demat form (ETF) or fund units (FoF)
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“No asset class consistently outperforms across all market cycles. Diversification is essential to managing risk and optimizing returns. Historically, gold has helped enhance risk-adjusted returns in portfolios during economic downturns and inflationary periods,” said Vinod Malviya, Fund Manager at Union AMC.
“These NFOs mark our foray into the gold investment space at a time when investors are looking for diversified solutions. India remains the world’s largest consumer of gold, and these funds offer a structured way to participate in the gold market. For investors seeking long-term diversification, these NFOs may be a suitable option,” said Madhu Nair, CEO, Union AMC.
