Edelweiss Asset Management launches ‘Gold and Silver ETF Fund of Fund’

"Gold and silver have proven to be popular investment tools in current times as they offer a hedge against inflation. These precious metals also have a low correlation with equities and therefore offer you better diversification. Compared to physical gold and silver, the Mutual Fund structure offers greater convenience, affordability, and liquidity,"  Edelweiss Asset Management said in a statement.

Speaking on the fund launch Radhika Gupta, MD & CEO Edelweiss Asset Management Limited said, “We are delighted to be the first fund house to launch this solution which gives exposure to gold and silver in one fund. The investment case for these precious twins is very strong as they provide good diversification benefits.

"Investors can take advantage of gold’s properties to hedge away inflation and leverage the growing use of silver in the manufacturing of new-age technology products. The Fund of Fund structure provides ease and tax efficiency while rebalancing.”

Edelweiss Gold and Silver ETF Fund of Fund is suitable for investors seeking to invest in asset classes that can aid portfolios during the downturn, she said.

"It can help investors offset the volatility in their equity portfolios. Both metals have underperformed in recent times and the dollar index, which has an inverse correlation with gold and silver, may weaken in the near term, hence, it could be a good time to invest in gold and silver at this point in time,” she emphasised.

Edelweiss Mutual Fund’s investment scheme provides exposure to gold and silver. A mix of gold and silver is ideal as gold performs well during the recession while silver outperforms during precious metal bull rallies, according to the company.

Both provide a good hedge against inflation in the long run and have low correlations with equities. Both precious metals have limited supply and their demand is rising very fast.

Especially, demand for silver can benefit from rising new-age technology demands from Electric Vehicles, smartphones, and solar panels.

The fund is ideal for those seeking to diversify and mitigate the volatility in their equity portfolio, the company further said.

The scheme is a cost-effective and liquid alternative to physical gold and silver. The Fund will be managed by Bhavesh Jain and Bharat Lahoti, it added.