By Sethuraman NR
BENGALURU (Reuters) – India’s Mire Asset Mutual Fund aims to launch its first commodity-linked exchange-traded fund (ETF) by the end of the first quarter of 2023, the company’s head of passive investment products said on Friday.
Mirae Asset Investment Managers India has submitted an application to India’s market regulator, the Securities and Exchange Board of India, to launch a gold and silver ETF and a gold and silver asset allocation product, ATF head of products Siddharth Srivastava told Reuters. In an interview.
“(Gold ETF) is a good product that one can use in asset allocation. Indians have a special place for gold from an investment point of view,” said Srivastava, adding that it will take some time before silver gains.
Mirae Asset Mutual Fund had more than 1.16 trillion rupees ($14.03 billion) in assets under management as of Nov. 30.
The exchange-traded funds created a risk-free product for each security issued by physical shares of a particular commodity.
Investors in India, the world’s second-largest consumer of gold, are keen to buy physical gold, investing mostly in equity-linked ETFs and index funds.
ETFs can be easily traded in small amounts and have some advantages such as low expense ratios, which is why many investors are comfortable and the segment continues to grow, Srivastava said.
According to data from the Association of Mutual Funds of India, net inflows into gold ETFs at the end of November this year were Rs 7.30 billion. Nippon India, HDFC Mutual Fund and State Bank are some of the financial companies that offer gold ETF products in India.
The world’s largest gold-backed exchange-traded fund (ETF) — New York’s SPDR Gold Trust GLD — is down more than 6% this year, underpinned by spot gold’s performance of less than 3%.
However, Srivastava said there is strong investment demand for gold ETFs.
($1 = 82.6930 Indian Rupees)
(Reporting by Nallur Sethuraman and Bharat Rajeswaran in Bengaluru; Editing by Sawmyadeb Chakrabarti)
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