Union Mutual Fund launches Two New Schemes for Gold Investment

Union Mutual Fund has launched a new duo of schemes for gold investing, the Union Gold ETF and the Union Gold ETF Fund of Fund (FoF) schemes that have broadened their horizons. These schemes are designed for structured investments in gold now that investors need diverse solutions.

The two funds opened for subscription on Monday and will remain open until February 24 for a minimum investment of Rs.1,000. Gold has always been associated with portfolio diversification due to its low correlation to other asset classes and its role as an inflation hedge. This supports its attractiveness as an investment, driven by the growing global demand for gold, notably from central banks around the world.

Key Benefits of the Newly Introduced Gold Schemes

The new schemes give investors a cost-effective avenue to gold investment without the hassle of storage or making charges. The units of these schemes are backed by gold of specified purity and can be easily bought, sold, or redeemed like any other open-ended mutual fund or exchange-traded fund (ETF). Since the gold is held in dematerialized (demat) form in the case of the ETF, or as fund units in the FoF, investors are safeguarded from risks such as theft.

This is the initial entry of fund house schemes into gold investment, which is consistent with India’s position as the largest consumer of gold in the world. The schemes are efforts to entrench a structured approach toward gold investments for long-term portfolio diversification.

Details of Union Gold ETF

The Union Gold ETF is intended to deliver returns in sync with domestic gold prices before costs incurred in owning it; it is going to invest fully in physical gold. However, just like all market-linked investments, there can be no assurance that the target will be achieved.

• Scheme Type: Open-ended
• Scheme Category: Gold ETF
• Benchmark: Domestic price of physical gold
• Minimum Investment: Rs. 1,000, with further purchases permissible in multiples of Re. 1.
• Exit Load: 1% if units are redeemed within one year

Details of Union Gold ETF Fund of Fund (FoF)

Union Gold ETF FoF aims to achieve long-term capital appreciation through investments in units of the Union Gold ETF. It confronts such market risks as do ETF investments.

• Scheme Type: Open-ended
• Scheme Category: Fund of Fund (FoF) – Domestic
• Benchmark: Domestic price of physical gold
• Minimum Investment: Rs.1,000, with additional investments in multiples of Re. 1 thereafter
• Exit Load: 1% if units are redeemed within one year

These two schemes will thus be managed by Vinod Malviya, assuring a professional approach for any investor looking to gain gold exposure in a structured and efficient manner.