DSP Gold ETF

About DSP Gold ETF (GOLDETFADD)

• DSP Gold ETF (GOLDETFADD) is an open-ended exchange traded fund (ETF) belonging to DSP Mutual Fund house.
• The fund, focused on physical gold, was launched on April 28, 2023.
• The total Assets Under Management (AUM) of the fund is ₹461.48 crore as of June 30, 2024.
• Since April 2023, Ravi Gehani has been managing the DSP Gold ETF.
• The fund, which trades under the symbol GOLDETFADD, is listed and traded on the BSE as well as the NSE.
• The ETF units can be bought and sold directly through a demat account with a registered broker.

Investment objective and benchmark of DSP Gold ETF

• The fund’s benchmark is the domestic price of physical gold based on London Bullion Market Association (LBMA) gold daily spot fixing price.
• Taking into consideration possible tracking errors, the fund seeks to provide returns that closely replicate the performance of actual gold at local prices.
• The tracking error is 0.3%, which suggests that it deviates from its benchmark index only slightly.
• The ETF seeks to diversify portfolios and possibly improve risk-adjusted returns by taking advantage of gold’s lower correlation with other asset classes.
• The ETF gains from rising global gold prices and declining currency values. The current environment is beneficial for gold, with the dollar index declining and dovish monetary policies anticipated.
• A high risk investment instrument, the ETF is suited for individuals looking at a long term investment gold.

Asset allocation and portfolio composition

• The recommended asset allocation has been set at 95% to 100% in gold and gold-related instruments in order to achieve the fund’s investment objectives. Of the net assets, 97.43% are made up of the total amount of commodities held.
• The remaining percentage, in cash and cash equivalents, ranges from 0% to 5%.

Top holdings for DSP Gold ETF (as on June 30, 2024):

• Gold 995: 97.38%
• Gold 999: 0.05%
• TREPS / Reverse Repo Investments: 0.09%
• Cash and cash equivalents: 2.48%

As of June 28, 2024, the ETF had achieved a compound annual growth rate (CAGR) of 15.52% since its inception.

In comparison, the domestic price of physical gold has grown at a CAGR of 15.76% over the same period.