Upcoming NFO: The Wealth Company Mutual Fund Files Draft for Wealth Company Gold ETF

The Wealth Company Mutual Fund has filed draft documents with the Securities and Exchange Board of India (SEBI) to launch Wealth Company Gold ETF. 

The Wealth Company Gold ETF introduces an open-ended exchange-traded fund scheme designed to replicate the domestic price of gold, allowing investors to benefit from physical gold movements without direct holding. This product caters to those seeking a transparent, regulated vehicle for gold investment in dematerialised form, with daily NAV disclosure, listing on NSE and BSE, and liquidity for both retail and large investors. 

Scheme Highlights: Gold-Backed Investing 

The fund's objective is to generate returns in line with domestic gold price, before expenses, by investing in physical gold and related instruments. At least 95% of the scheme's assets will be allocated in gold or gold-linked instruments, with up to 5% in high-quality debt or money market securities for liquidity management.  

Minimum investment for initial subscription is ₹5,000 and further investments can be made in multiples of ₹1,000. The scheme units are fully dematerialised and tradeable like stocks, ensuring continuous market access for investors through NSE and BSE. 

Investors can choose to transact either directly through the AMC in large creation units of 1,00,000 units or more, or via standard market lots on exchanges. There is zero exit load for large investors redeeming directly with the fund, and for secondary market trades, no exit load applies. 

Operational Framework and Transparency 

The benchmark for this ETF is the domestic price of physical gold, with NAV disclosed daily on both the AMC's and AMFI websites by 9:00 AM of the next business day. Units are allotted in whole figures and account statements are issued promptly after allocation. The expense ratio is capped at 1% of daily net assets, covering all major operational costs.  

For liquidity, the AMC ensures participation by market makers, and investors can redeem their holdings directly with the fund under specific market conditions. 

Read More: Edelweiss Mutual Fund Files Draft for Gold and Silver ETF FOF! 

Risk Management and Regulatory Compliance 

The scheme maintains gold custodied and insured appropriately, offering risk mitigation against loss, damage, or theft. Investments in Exchange Traded Commodity Derivatives (ETCDs) are capped as per SEBI regulations, with total gold-related exposure not exceeding 50% of net asset value, and specific sub-limits for Gold Deposit and Monetization Schemes. The ETF does not invest in corporate debt, foreign securities or structured obligations, maintaining a focus only on domestic gold price exposure and liquidity management. 

Conclusion 

The Wealth Company Gold ETF offers investors a regulated and liquid avenue to participate in the movement of domestic gold price. With compliance to SEBI norms, daily transparency, and tradability, the scheme provides an option for risk-averse investors to align their portfolios with gold performance in a professional, exchange-based setting. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or 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 scheme-related documents carefully.