Kotak Mahindra AMC launches Gold Silver Passive Fund of Fund, more details

Kotak Mahindra Asset Management Company (KMAMC) has announced the launch of the Kotak Gold Silver Passive Fund of Fund, with its New Fund Offer (NFO) available for subscription until October 20. The fund gives investors access to a portfolio of both gold and silver by investing in the Kotak Gold ETF and Kotak Silver ETF. The allocation between the two precious metals is managed using in-house quantitative models, enabling dynamic adjustments and eliminating the need for manual rebalancing. This structure is designed to deliver disciplined exposure to gold and silver, combining professional management with tax efficiency.

Gold and silver have traditionally been regarded as portfolio diversifiers due to their low correlation with equities and with each other. Gold is commonly viewed as a hedge against inflation and geopolitical uncertainty, while silver is distinguished by its growth potential, stemming from rising industrial demand and relatively constrained supply.

Historical data show that a 50:50 allocation to these metals has provided diversification benefits and, in certain years, surpassed the performance of the Nifty 500 TRI. The Kotak Gold Silver Passive FoF periodically adjusts its allocation based on market conditions, aiming to maintain optimal diversification and benefit from timely rebalancing.

The fund is structured to offer cost-effective access to both gold and silver within a single investment, supporting investor efforts to diversify portfolios without requiring active intervention. Its passive fund-of-funds format ensures that allocation is systematically managed, with adjustments reflecting prevailing market trends and price movements.

By investing in both metal ETFs under a unified scheme, investors can achieve exposure to assets that help mitigate equity market risk and offer potential protection against inflationary pressures.