Edelweiss Asset Management Limited has recently launched a new scheme - ‘Edelweiss Gold and Silver ETF Fund of Fund’. The new fund offer (NFO) is open for subscription till September 7, 2022.
About the fund
This an open-ended scheme that invests in Gold and Silver Exchange Traded Funds (ETFs).
The fund is being managed by Bhavesh Jain and Bharat Lahoti.
Is the fund worth investing?
According to Radhika Gupta, MD & CEO Edelweiss Asset Management Limited, the investment case for these precious twins is very strong as they provide good diversification benefits.
"Investors can take advantage of gold’s properties to hedge away inflation and leverage the growing use of Silver in the manufacturing of new-age technology products. The Fund of Fund structure provides ease and tax efficiency while rebalancing," she said.
As we know,
gold and silver offer a hedge against inflation. These precious metals also have a low correlation with equities and therefore offer better diversification. Compared to physical gold and silver, the
Mutual Fund structure offers greater convenience, affordability, and liquidity.
Hence, investors can take a plunge here, experts opine.
Talking specific about the fund, Gupta said that investment scheme provides good exposure to gold and silver.
"A mix of gold and silver is ideal as gold performs well during the recession while silver outperforms during precious metal bull rallies. Both precious metals have limited supply and their demand is rising very fast. Especially, demand for silver can benefit from rising new-age technology demands from electric vehicles, smartphones, and solar panels. The scheme is a cost-effective and liquid alternative to physical gold and silver," she added.
Who should invest?
The fund is suitable for investors seeking to invest in asset classes that can aid portfolios during the downturn. It can help investors offset the volatility in their equity portfolios.
Both metals have underperformed in recent times and the dollar index, which has an inverse correlation with gold and silver, may weaken in the near term, hence, it could be a good time to invest in gold and silver at this point in time.
The fund is ideal for those seeking to diversify and mitigate the volatility in their equity portfolio.
What riskometer says about the fund?
(Source: Edelweiss Asset Management )
How gold has performed recently?
(Source: Bajaj Capital)
