Axis Gold ETF a Better And Easier Way To Invest In Gold

ETFs are open- ended exchange traded funds, which are listed on the stock exchange and are traded just like stocks. ETFs typically track a basket of securities, an index, or a commodity. For example, an ETF tracking an equity index such as Nifty 50 will replicate the underlying constituents of the Nifty 50 by matching investments in the constituents of Nifty 50 in the same proportion as they are in the index.

Benefits of investing in exchange traded funds

Ease of transaction: ETFs can be easily bought and sold like any other stock on the exchange either directly or through a broker

Low Cost: ETFs are relatively lower in cost compared to trading in individual stocks and actively managed mutual funds

No minimum amount needed: An investor can buy a basket of securities by purchasing as low as a single unit

Live pricing: An investor can buy / sell an ETF at the price prevailing on the exchange and not wait for the end of day NAV as is the case in a normal mutual fund scheme

Performance: Since the ETF tracks a particular index, the performance is in line with the performance of the underlying index, subject to tracking error

Unit creation: Authorized Participants / Large investors can create / redeem units directly from the AMC in case of tightness in liquidity on the exchange

What is Gold ETF?

Gold exchange traded fund is a commodity based ETF that uses gold assets as the benchmark for generating capital appreciation. The units of a gold ETF are traded at the stock exchange just like any other company stock. Retail investors can invest in a gold ETF instead of investing in physical form of the precious yellow metal. Physical gold has been used as a hedge against inflation. By investing in gold ETF, investors can now save themselves from the hassles of preserving physical gold.

Axis Gold ETF – An ETF scheme by Axis Mutual Fund

Axis Gold ETF is an open-ended scheme replicating / tracking Domestic Price of Gold. The investment objective of Axis Gold ETF is to generate returns that are in line with the performance of gold.

Benefits of investing in Axis Gold ETF

Diversification: A tried and tested asset class, across time periods, which provides investors the requisite portfolio diversification

Safety: Investors need not worry about the quality of gold as the same is held in demat form

Security: Unlike physical gold, the risk of theft is eliminated as gold units are stored in an electronic form

Safe Haven: Historically, gold has been relied upon as a safe haven in times of financial or economic crisis

Ease of transaction: Gold ETFs can be easily bought and sold like any other stock on the exchange compared to physical purchase through jeweler

Investment strategy

The Scheme endeavors to generate returns that are in line with the performance of gold, subject to tracking errors. The Scheme is not actively managed, and no attempt is made to buy or sell gold to protect against or to take advantage of fluctuations in the price of gold. The AMC does not make any judgments about the investment merit of gold or particular security nor does it attempt to apply any economic, financial or market analysis. The Scheme shall invest all of its funds in gold, except to meet its liquidity requirements.

Liquidity offered by the scheme

All investors including Authorized Participants, Large Investors and other investors may buy / sell their units on all the trading days of the stock exchange(s) on which the units are listed. There is no minimum investment, although units are normally traded in round lots of 1 unit. Alternatively, Authorized Participants and Large Investors can directly subscribe / redeem from the AMC in 'Creation Unit' size. The AMC shall appoint Authorized Participants (AP) who will provide a two-way quote in the secondary market in order to provide liquidity in the market.

Risk profile of the scheme

Mutual Fund Units involve investment risks including the possible loss of the principal amount. Please read the SID carefully for details on risk factors before investing in the scheme. Scheme specific Risk Factors are summarized below:
• The scheme carries risks associated with investing in gold and money market instruments
• Investment in Scheme’s units involves investment risks such as market risks, trading volume risk, settlement risk, liquidity risk and default risk. The AMC may choose to invest in unlisted securities which may increase the risk on the portfolio
• The value of the Scheme’s investments may be affected by currency exchange rates, changes in law/policies of the government, taxation laws and political, economic, or other developments
• Investments in money market instruments are subject to interest rate risk, reinvestment risk, liquidity risk, credit risk, settlement risk, etc.

Axis Gold ETF

An open ended scheme replicating/tracking Domestic Price of Gold

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.