Mumbai, April 17, 2023: DSP Asset Managers announced the launch of DSP Gold ETF, an open-ended exchange traded fund (ETF) replicating/tracking domestic prices of Gold. At a time when favourable macro factors and strong fundamentals indicate a good time to buy Gold, this new ETF offers investors an easier way to buy or sell gold compared to the physical version with the freedom to trade easily.
Investments in gold have typically done well at a time when there is a weakness in the dollar. With factors such as a global slowdown, the post – covid jump in dollar and expected monetary easing, the dollar is expected to weaken going forward, which could start a multi – year bull market in Gold . With global liquidity drying up, demand for Gold investments coming back and improvement in Central banks’ holding, the fundamentals are strong for a bullish gold outlook.
Holding gold in one’s portfolio can help to smoothen their investing journey as Gold is an asset class whose prices typically move in a different direction from other asset classes. Such diversification in their portfolio can help it fall lesser during times of a downturn. However, being a cyclical asset class, entering at the wrong time can impact returns in the short term.
The New Fund Offer for the DSP Gold ETF opens on April 17th, 2023, and closes on April 24th, 2023.
“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% of your portfolio,” says Anil Ghelani, CFA, Head – Passive Investments & Products, DSP Asset Managers.
“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,” says Ravi Gehani, Fund Manager, DSP Asset Managers.
Find out more about the fund here.