Upcoming NFO: Monarch Mutual Fund Files Draft for Monarch Gold Passive Fund of Funds

Monarch Mutual Fund has filed the draft Scheme Information Document for its Monarch Gold Pasasive Fund of Funds. The scheme will invest in units of Gold Exchange Traded Funds (ETFs) and seek to generate returns based on their performance.  

Returns may differ from those of the underlying ETFs due to tracking error. The scheme falls under the domestic commodity-based fund of funds category.  

The issue price during the New Fund Offer (NFO) will be ₹10 per unit. The draft document does not specify the opening and closing dates. 

Gold ETF Allocation 

The scheme will invest 95% to 100% of its total assets in Gold ETFs. The remaining 0% to 5% may be held in liquid or debt mutual fund schemes and permitted debt and money market instruments to meet redemption requirements. 

The draft names Mirae Asset Gold ETF, Tata Gold ETF, Angel One Gold ETF and Zerodha Gold ETF among the funds in which investments may be made. The selection process will consider trading volume, liquidity, bid-ask spreads, and total expense ratios.  

Units may be purchased through stock exchanges or directly from the underlying schemes. 

Benchmark and Performance 

The scheme will use the Domestic Price of Physical Gold as its benchmark. The underlying Gold ETFs invest in physical gold and track its domestic price. 

Performance data is not available as the scheme is yet to be launched. According to the document, daily performance disclosures will be published on the Association of Mutual Funds in India (AMFI) website after the scheme completes six months. 

Investment and Redemption Rules 

The minimum application amount during the NFO will be ₹100, with investments accepted in multiples of ₹1 thereafter. The offer must remain open for at least three working days and no more than 15 calendar days. 

The scheme is expected to reopen for subscriptions and redemptions within five business days of allotment. Redemptions or switches made within 30 days of allotment will attract an exit load of 0.50%. No exit load will apply after 30 days. 

Expense Ratio 

The draft estimates a base expense ratio of up to 0.90% of daily net assets, including the weighted average base expense ratio of the underlying Gold ETFs. The actual total expense ratio has not been disclosed. 

The NFO schedule and final expense details remain unspecified in the draft document. 

Read More: Parag Parikh Flexi Cap Fund Adds 13 Stocks in September, Including DLF, Bharti Airtel and Indus Towers! 

Conclusion  

The draft sets the scheme’s Gold ETF allocation at 95% to 100% of assets. The NFO opening and closing dates have not been announced in the document. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.