New Delhi [India], February 14: Union Mutual Fund has announced the launch of two New Fund Offers (NFOs)—Union Gold ETF and Union Gold ETF Fund of Fund (FoF)—providing investors with an opportunity to add gold exposure to their portfolios in a structured and convenient manner.
Both NFOs opened on February 10, 2025. The Union Gold ETF closes on February 17, 2025, while the Union Gold ETF Fund of Fund closes on February 24, 2025.
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 scheme 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 Mr. Vinod Malviya, Fund Manager, Union AMC.
The benchmark for both schemes is the Domestic Price of Physical Gold. Investors can invest a minimum of ₹1,000 and in multiples of ₹1 thereafter during the NFO period.
Market Context & Gold’s Role in Asset Allocation
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.
Key Benefits of These NFOs:
- 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.
- No theft risk as the gold is held in Demat form (ETF) or fund units (FoF).
Expert Insights
Vinod Malviya, Fund Manager at Union AMC, said: “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.”
Madhu Nair, CEO, Union AMC, remarked: “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.
The Union Gold ETF Fund of Fund NFO opened for subscriptions on February 10th, 2025, and closes on February 24th 2025 and will re-open within 5 business days from allotment.
The Union Gold ETF NFO opened for subscriptions on February 10th, 2025, and closes on February 17th, 2025, and will re-open within 5 business days from allotment.
Disclaimer: The information in this document alone is not sufficient and should not be used for the development or implementation of an investment strategy. Neither the Sponsors/the AMC/ the Trustee Company/ their associates/ any person connected with it, accepts any liability arising from the use of this information. While utmost care has been exercised while preparing this document, the Sponsors/ the AMC/ the Trustee Company/ their associates/ any person connected with it, do not warrant the completeness or accuracy of the information and disclaim all liabilities, losses and damages arising out of the use of this information. The recipients of this material should rely on their investigations and take their own professional advice. Past performance may or may not be sustained in future.
Please refer the Scheme Information Document for complete details about the Scheme. Copy of all Scheme Related Documents can be obtained from any of our AMC offices/ Customer Service Centres/ distributors as well as from our website www.unionmf.com
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.