NFO launch | DSP Gold ETF available for subscription till April 24

DSP Asset Managers announced the launch of DSP Gold ETF on Monday. The newly launched New Fund Offer (NFO) is an open-ended exchange traded fund (ETF) that replicates domestic gold prices. It opened for subscription on April 17 and will be available till April 24, 2023.

The NFO DSP Gold ETF provides investors with a more convenient way to buy or sell gold compared to the physical version, at a time when the current macroeconomic conditions and strong fundamentals indicate a favorable time to invest in gold.

"Just as it is important to have a well-balanced diet for good nutrition, we should consider having a well-diversified portfolio with some Gold ETFs. Gold gives us an opportunity to hedge against a standard 'equity-debt portfolio' due to its low correlation with equity and often a negative correlation with debt as an asset class. Rather than taking a tactical view, I would suggest investors seek guidance from their trusted advisor and consider holding Gold ETFs on an ongoing basis, as a strategic asset allocation, in the range of 5 to 10 percent of your portfolio," said Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Asset Managers.

Gold investments have traditionally performed well during times of weakness in the dollar, and with factors such as a global slowdown, expected monetary easing, and the post-COVID jump in the dollar, the dollar is expected to weaken, which could start a multi-year bull market in gold.

Additionally, with global liquidity drying up and demand for gold investments returning, the fundamentals are strong for a bullish gold outlook.

Adding gold to one's investment portfolio can provide diversification, as gold prices typically move in a different direction from other asset classes, helping to reduce portfolio risk during times of market downturns. However, investors should also keep in mind that gold is a cyclical asset class, and entering at the wrong time could impact returns in the short term.

"With bulk of interest rate hikes likely behind us and continued volatility from global uncertainty, gold prices are expected to see upward movement. With China opening up their economy, and India seeing demand going back to pre-covid levels, Jewelry and Investment demand from the world’s two largest gold consumer nations is expected to pick up, building a good case for Gold,” said Ravi Gehani, Fund Manager, DSP Asset Managers.