Why
Should You Invest in Gold ETF and
Gold ETF FoF?
Sivakasi Manikandan, AISMONEY
HSBC
Mutual Fund launches its first Gold ETF and Gold ETF FoF in India
As gold
continues to gain importance as a key asset class in the Indian investment
market, HSBC Mutual Fund has announced the launch of its first Exchange Traded
Fund (ETF) offerings in India. The company has introduced two new schemes — HSBC Gold ETF and HSBC Gold ETF Fund of Fund (FoF).
This launch marks the first ETF offerings by HSBC Mutual Fund in India.
Both these
schemes provide investors with a modern and convenient way to invest in gold.
Instead of buying and storing physical gold, which involves security concerns,
storage costs, and maintenance issues, investors can gain exposure to gold
through financial instruments.
NFO
Period
The
subscription period for the New Fund Offer (NFO) has been announced as follows:
·
HSBC Gold ETF – March 16, 2026 to
March 18, 2026
·
HSBC Gold ETF Fund of Fund (FoF) – March 19, 2026 to
March 25, 2026
Both schemes
will be managed by fund manager Deepan Parekh.
HSBC
Gold ETF – How it Works
HSBC Gold
ETF is a scheme that invests directly in physical gold or gold-related
instruments. The performance of the fund will be linked to the domestic price
of gold.
The
investment objective of the scheme is to generate returns that closely
correspond to the performance of domestic gold prices, subject to tracking
errors and before expenses.
The ETF
units will be traded on stock exchanges such as the National Stock Exchange of
India (NSE) and the Bombay Stock Exchange (BSE), allowing investors to buy and
sell them just like shares.
HSBC
Gold ETF Fund of Fund – How it Works
The HSBC
Gold ETF FoF does not invest directly in gold. Instead, it invests in the units
of HSBC Gold ETF.
The
objective of this scheme is to provide returns that are similar to the returns
generated by HSBC Gold ETF.
To invest
directly in ETFs, investors need a demat account. However, the FoF structure
allows investors to participate without needing a demat account, making it more
accessible for mutual fund investors.
Investors
can invest in the FoF scheme through multiple options such as:
·
Lumpsum
investment
·
SIP
(Systematic Investment Plan)
·
SIP
Top-up
·
STP
(Systematic Transfer Plan)
·
SWP
(Systematic Withdrawal Plan)
Minimum
Investment
The minimum
investment required in both schemes during the NFO period is ₹5,000.
Investment
Allocation
HSBC Gold
ETF will invest at least
95% of its total assets in gold or gold-related instruments. Up
to 5% of
the assets may be invested in money market instruments.
Similarly,
HSBC Gold ETF FoF will invest a
minimum of 95% of its assets in units of HSBC Gold ETF. The
remaining up to 5%
may be invested in debt or money market instruments.
Importance
of Gold in an Investment Portfolio
Gold has
traditionally held an important place in Indian households as a form of
savings. However, in recent years, gold has increasingly been recognized as an
important investment asset class.
It plays a
key role in portfolio diversification.
During periods of stock market volatility, gold often acts as a safe-haven asset.
Since the correlation between gold and equities is relatively low, adding gold
to a portfolio can help reduce overall investment risk.
Why
Should You Invest in Gold ETF?
1.
Protection Against Market Volatility
Compared to
other asset classes such as equities and debt instruments, gold generally has a
low correlation with financial markets. During periods of high volatility in
equity markets, gold often acts as a protective asset for investors.
2.
Improved Portfolio Performance
A
well-balanced asset allocation strategy can improve long-term portfolio
performance. A combination of equities, debt, and gold can help investors
achieve more stable and sustainable long-term growth.
Overall,
HSBC Gold ETF and Gold ETF FoF provide investors with a convenient and
efficient way to invest in gold. These schemes eliminate the challenges
associated with buying and storing physical gold while still allowing investors
to benefit from movements in gold prices. By including gold as part of a
diversified investment portfolio, investors can improve risk management and
enhance long-term financial stability.
For More details and investment
Sivakasi Manikandan, MBA (F&M), [MBA, I & FP],
FChFP, CIS, AMFI, CII (London)
Managing Director – AISMONEY
AMFI Registered Mutual Fund
Distributor - ARN-33652
No. 21, MBT Road, (Opp) Indian Bank, Walajapet - 632 513
Ranipet Dt. Tamil Nadu, India.
+ 91 98405 77675
+ 91 96777 66393 (Office)
support@aismoney.com
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme
related documents carefully. The past performance of the mutual funds is not
necessarily indicative of future performance of the schemes.
