Question 1

What is Tata Gold ETF Fund of Fund?

Accepted Answer

Tata Gold ETF Fund of Fund is an open-ended mutual fund scheme designed to provide investors exposure to gold prices without directly holding physical gold. Instead of purchasing gold itself, this Fund of Fund (FOF) invests primarily in units of Tata Gold Exchange Traded Fund (ETF). By pooling investors' money and allocating it to the underlying Gold ETF, the fund aims to mirror the performance of gold as an asset class. This structure allows investors to benefit from gold price movements through a simple mutual fund investment route, making it accessible even to those without a demat account or stock market experience.

Question 2

How is Gold ETF Fund of Fund (FOF) different from a Gold Exchange Traded Fund?

Accepted Answer

Gold ETF Fund of Fund (FOF) differs from a Gold Exchange Traded Fund (ETF) mainly in how investors access gold as an asset:

A Gold ETF trades on the stock exchange like a share and requires a demat account for buying and selling.
A Gold ETF Fund of Fund is a mutual fund that invests in Gold ETFs, but you can invest through the regular mutual fund route, requiring no demat account or direct stock market access.
FOF offers added convenience for investors without demat accounts and allows for systematic investment plans (SIPs), which traditional ETFs may not offer.

Question 3

Can Tata Gold ETF Fund of Fund be an alternative to physical gold?

Accepted Answer

Yes, Tata Gold ETF Fund of Fund can be a practical alternative to holding physical gold. It allows investors exposure to gold price movements without the hassles of storage, security, or concerns about purity. Additionally, the fund provides liquidity and can be bought or sold on any business day at the prevailing net asset value (NAV).

Question 4

Is Tata Gold ETF Fund of Fund suitable for diversification?

Accepted Answer

Absolutely. Including Tata Gold ETF Fund of Fund in your investment portfolio can enhance diversification, as gold often behaves differently from equities and debt instruments. During times of market volatility or inflation, gold tends to retain its value or even appreciate, helping to mitigate risks associated with other asset classes.

Question 5

Who should consider investing in Tata Gold ETF Fund of Fund?

Accepted Answer

This fund is suitable for investors who:

Want exposure to gold as an asset class without holding it physically
Do not have a demat account but want to invest in gold-linked instruments
Are looking for portfolio diversification and a potential hedge against inflation or currency depreciation
Prefer systematic investment options (SIP) in gold

Question 6

What are the key benefits of Tata Gold ETF Fund of Fund?

Accepted Answer

The key benefits of Tata Gold ETF Fund of Fund include:

No need for a demat account: Easy access through mutual fund route
Liquidity: Can be bought or sold on any business day at the prevailing NAV
Purity assurance: Backed by underlying Gold ETFs that invest in high-purity gold
Systematic investment option: Allows SIPs and other mutual fund features
Professional management: Managed by experienced fund managers
Convenience: Avoids storage and security issues of physical gold

Question 7

What are the risks associated with Tata Gold ETF Fund of Fund?

Accepted Answer

The risks of Tata Gold ETF Fund of Fund include:

Market risk: The funds value depends on gold price movements, which can be volatile
Tracking error: Returns may not exactly match gold prices due to expense ratio and fund structure
Expense ratio: Two layers of fees may be involvedâat the FOF and the underlying ETF level
Liquidity risk: Redemption may take longer compared to direct ETF sales, as mutual fund units are redeemed at the prevailing NAV

Question 8

How does Tata Gold ETF Fund of Fund invest in gold?

Accepted Answer

The FOF invests the majority of its assets in units of Tata Gold Exchange Traded Fund, which, in turn, invests in physical gold of high purity (typically 99.5% or more). By purchasing units of this FOF, investors indirectly invest in the underlying gold held by the ETF.

Question 9

What is the tax treatment for gains from Tata Gold ETF Fund of Fund?

Accepted Answer

For taxation purposes, Gold ETF Fund of Fund is treated as a non-equity mutual fund in India:

Short-term capital gains (if held for 24 months or less) are added to your income and taxed as per your applicable income tax slab.
Long-term capital gains (if held for more than 24 months) are taxed at 12.5% without indexation.

Note: Tax rules may change, and it's advisable to consult a tax professional for current regulations.

Question 10

How can I invest in Tata Gold ETF Fund of Fund without a demat account?

Accepted Answer

Investing in Tata Gold ETF Fund of Fund is straightforward and does not require a demat account. You can invest through:

Mutual fund distributors or agents
Online platforms of mutual fund houses
Banks and financial advisors registered with the fund
Direct online investment via the Tata Mutual Fund website or other authorized portals

Simply complete the know-your-customer (KYC) process if not already done, and you can start investing, including via SIP and lump sum routes.

Key Measures**	Fund	Benchmark
Standard Deviation
Sharp Ratio
Portfolio Beta
R Squared
Treynor
Jenson

Portfolio Macauley Duration
Modified Duration
Average Maturity
YTM*	NA

				Current value of ₹10,000 invested
	Annualized (%)	Domestic Price of GoldBenchmark(%)	NAAdditional Benchmark(%)	Scheme	Domestic Price of GoldBenchmark(%)	NAAdditional Benchmark(%)
Since Inception	33.65%	36.55%	NA	₹15,956	₹16,517	NA
Last 5 Years	NA	NA	NA	NA	NA	NA
Last 3 Years	NA	NA	NA	NA	NA	NA
Last 1 Year	39.93%	42.71%	NA	₹13,980	₹14,257	NA

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