Mumbai: DSP Mutual Fund has announced the opening of the DSP Gold Exchange Traded Fund (ETF) Fund of Fund (the scheme), an open-ended fund-of-funds program that invests in DSP Gold ETFs. Comparing the physical version to the scheme, investors can invest in gold with ease and freedom of trading, just like in a typical mutual fund scheme.
Subscriptions for the DSP Gold ETF Fund of Fund’s New Fund Offer will be accepted starting today, November 3, 2023, and ending on November 10, 2023.
Due to its low correlation with equity and debt, gold makes a great addition to a typical equity-heavy portfolio. Anil Ghelani, CFA, Head of Passive Investments & Products, DSP Mutual Fund, says, “The scheme structure presents a convenient way to diversify your portfolio and systematically accumulate gold, automatically adding depth and multi-dimensionality to your investments.”
The lack of global liquidity, rising central bank demand, and stagnant gold supply have put the metal in the spotlight. Gold investments have historically performed well when the dollar has weakened. Gold is a good alternative to diversify away from equity because it has historically had a negative or low correlation with equity. The benefit of owning gold in a digital format that is convenient to use without requiring a Demat account to transact is provided by the DSP Gold ETF Fund of Fund. In addition, it offers a methodical approach to investing in gold through SIPs and the freedom to redeem units at any time without incurring any lock-in costs.
Since the price of gold usually moves in a different direction than other asset classes, having gold in one’s portfolio can also make the investing process easier. Therefore, holding gold in an investor’s portfolio contributes to portfolio diversification, which reduces portfolio decline during recessions. However, since this is a cyclical asset class, investing at the wrong time can have an immediate negative impact on returns.
