Upcoming NFO: Union Mutual Fund Files Draft for Silver ETF Fund of Fund

Union Mutual Fund has submitted draft documents for the Union Silver ETF Fund of Fund, an open-ended scheme that will mainly invest in units of the Union Silver ETF.  

The units will be offered at ₹10 during the New Fund Offer. The draft states that the scheme aims to generate long-term capital appreciation by investing in the underlying ETF, while also noting that this outcome is not guaranteed.  

Benchmark and Risk Label 

The scheme will use domestic prices of physical silver as its benchmark, as no broader index is available for tracking silver performance.  

Both the benchmark and the scheme fall in the “very high risk” category due to the price movements associated with silver. These classifications may shift once actual investments begin, and the portfolio is in place.  

Asset Mix and Limits 

According to the filing, 95-100% of the scheme’s assets will be invested in the Union Silver ETF. The remaining 0-5% may be held in debt or money market instruments to meet liquidity needs.  

The scheme does not plan to invest in securitised debt, structured obligations, or credit-enhanced securities. Any deviation from the stated allocation must be corrected within 30 calendar days.  

Costs and Key Conditions 

The estimated total expense ratio is capped at 1% of daily net assets, excluding GST. Redemption proceeds are expected to be paid within 3 working days.  

An exit load of 1% will apply to redemptions made within 1 year of allotment and will not apply thereafter. The scheme will be managed by Vinod Malviya, whose experience spans 17 years.  

Transactions and Investor Facilities 

Investors will have access to SIP, STP, and SWP options, as well as the ability to transact electronically or through stock exchange infrastructure.  

SIP instalments can begin at ₹100 for daily frequency, and ₹500 for weekly, fortnightly or monthly plans. The scheme will not be listed on an exchange; instead, liquidity will be available through daily purchase and redemption at NAV-based prices.  

Read More: Upcoming NFO: The Wealth Company Mutual Fund Filed Draft for Silver ETF! 

Conclusion 

The draft outlines a fund structure centred almost entirely around the Union Silver ETF, offering a route for investors who want exposure to domestic silver prices within a mutual fund format. 

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.