Understanding Axis Gold Funds: An Investor’s Guide
Investing in gold can provide a hedge against inflation and market volatility, and one way to do this is through a mutual fund. Axis Gold Funds, managed by Axis Asset Management Company Limited, are one such option for investors looking to invest in gold.
In this article, we’ll take a closer look at Axis and what investors need to know before investing in it.
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What Will I Learn?
- Investment Objective and Overview
- Fund House and Fund Manager
- Types of Axis Gold Funds
- Expense Ratio and Minimum Investment
- Fund Size and Asset Allocation for the Axis Gold ETF
- Performance and Risk-adjusted Returns
- Exit Load and SIP Returns on Axis Mutual Funds
- Final Thoughts
Investment Objective and Overview
Axis Gold Fund is a mutual fund scheme managed by Axis Asset Management Company Limited that invests in units of Axis Gold ETF, which in turn invests in physical gold.
The scheme seeks to generate returns corresponding to physical gold, gold-related instruments, and debt and money market instruments. Moreover, the fund’s investment objective is to provide investors with better risk-calculated returns compared to the domestic price of gold.
Fund House and Fund Manager
Axis Mutual Fund, established in 2009, is a subsidiary of Axis Bank Limited, and the fund house manages Axis Gold Funds. Additionally, the scheme is managed by Aditya Pagaria, who has been with Axis Mutual Fund since 2009 and has over 14 years of experience in the investment management industry.
Types of Axis Gold Funds
It offers two types of funds – Axis Gold Fund and Axis Gold ETF Fund. The former is an open-ended fund that invests in physical gold, gold-related instruments, and debt and money market instruments.
However, the latter is an open-ended fund that invests primarily in units of Axis Gold ETF, which in turn invests in physical gold.
Expense Ratio and Minimum Investment
Axis Gold Fund has a low ratio of 0.17%, meaning investors can benefit from low management fees. Furthermore, the minimum investment amount for both Axis Gold Fund and Axis Gold ETF Fund is Rs. 1,000.
Fund Size and Asset Allocation for the Axis Gold ETF
Axis Gold ETF is a popular instrument that tracks the price of gold and has provided investors with better risk-calculated returns than other gold ETFs in the market.
During the financial year 2021-22, the instrument weight of MF Units in the Axis Gold ETF was around 99.56%, 1.09% in CBLO, and 0.65% in Net Receivables/Payables.
Also Read: Gold ETF vs. Physical Gold
Performance and Risk-adjusted Returns
Axis Gold Fund has provided investors with better risk-adjusted returns in the past. The growth option of Axis Gold Fund has been able to generate returns that nearly correspond to the returns generated by Axis ETF, and the scheme has consistently outperformed the category avg (average).
Outperforming the Category Average
As of late, the Axis Gold Fund has provided a five-year CAGR of +11.91%, which is better than the category avg. in a financial year.
Furthermore, the scheme seeks to generate returns that will closely correspond to the domestic price of gold, making it a good investment option for investors looking for exposure to the gold market.
Exit Load and SIP Returns on Axis Mutual Funds
The fund has an exit load of 1% if redeemed within 15 days. Moreover, the scheme’s performance can also be tracked through its latest NAV (net asset value), which is updated regularly.
Investors can also benefit from investing in Axis Gold Fund through SIPs, providing them with good returns over the long term.
Axis Gold Fund is a good investment option for investors looking to invest in gold. With its low expense ratio, good risk-calculated returns, and the backing of Axis Mutual Fund, it is an excellent addition to an investor’s portfolio.
However, investors should always do their due diligence before investing and consult with their financial advisors to determine if this scheme is the right fit for their investment goals.
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