360 One Mutual Fund Files Draft For 360 ONE Gold ETF

360 ONE Mutual Fund, formerly known as IIFL Mutual Fund, has filed a draft for the launch of its 360 ONE Gold ETF. This open-ended exchange-traded fund (ETF) aims to replicate the domestic prices of physical gold, providing investors with an avenue for long-term capital appreciation. Each unit in the New Fund Offer (NFO) will be priced at ₹10, with subsequent purchases and redemptions based on the Net Asset Value (NAV).

Investment Objective & Strategy

The primary objective of the 360 ONE Gold ETF is to generate returns aligned with the domestic performance of physical gold, subject to tracking errors. The scheme will invest at least 95% of its assets in gold or gold-related instruments, with the remaining up to 5% in debt and money market instruments to ensure liquidity. The tracking error, which refers to the divergence between the ETF’s returns and the benchmark, is expected to remain minimal.

Features

• Liquidity and Trading: The units will be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), allowing investors to trade during market hours. A minimum trading lot will be one unit, enabling smaller investors to participate.
• No Exit Load: Investors can buy or sell units directly through the stock exchange without incurring entry or exit loads. However, brokerage charges and other transaction costs will apply.
• Benchmark: The ETF is benchmarked against the domestic prices of physical gold, ensuring alignment with market trends.

Risk Considerations

Investors should be aware of risks such as market volatility, regulatory changes, and tracking errors. As gold prices can fluctuate due to macroeconomic factors like inflation, interest rates, and currency movements, the ETF’s NAV will react accordingly.

Minimum Investment

During the NFO period, investors can start with as little as ₹500. For large transactions exceeding ₹25 crore, direct purchases and redemptions can be made with the Asset Management Company (AMC).

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.