Motilal Oswal Asset Management Corporation (MOAMC) has announced the launch of the Motilal Oswal Gold and Silver ETF FOF, which aims to generate returns by investing in units of both Gold ETFs and Silver ETFs. The NFO will open on September 26 and close on October 7. The minimum application amount for the Motilal Oswal Gold & Silver ETF FOF is Rs 500, followed by a multiple of Re 1.

According to the press release, the program will generate returns by investing in gold and silver ETF units. Daily weights should be market driven with a 70:30 start (NFO) assignment. The maximum weight is capped at 90%, subject to quarterly review. The initial higher allocation to gold was due to its high economic value and high liquidity. Also, it is relatively more stable compared to silver.

Gold is widely used in jewellery and is often considered a safe haven because it performs well in uncertain markets. In contrast, silver has a wide range of industrial applications and typically performs well during business recovery. Exposure to these two metals helps portfolios perform well in turbulent times and recoveries. Investors who want all the silver and gold in their portfolio can choose this option.

“To bring new investment opportunities, Motilal Oswal AMC has launched a gold and silver ETF FOF. This provides great diversification as gold and silver are less correlated with equities and thus act as a good diversifiers. Both metals offer good downside protection and tend to outperform in bear markets. Silver tends to outperform when markets recover from bear market phases. Through this programme, investors will be able to mitigate the risk of market volatility, enjoy portable wealth and rising economic value at the same time,” said Pratik Oswal, President of Passive Business, Motilal Oswal Asset Management.

“Gold and silver have long been the assets of choice for Indian households. These precious metals have been acquired and maintained in their physical form. However, we are witnessing high inflation around the world. Central banks have resorted to raising interest rates and neutralizing systemic liquidity to cope with runaway inflation. Gold is a hedge against inflation, preventing the loss of wealth and acting as a store of value in such situations. Even the world’s elite turn to precious metals to protect their wealth, as neither metal will lose value. Besides investments, jewellery and silverware, silver has major industrial applications, including green technologies,” said Navin Agarwal, MD and CEO of Motilal Oswal Asset Management.