ICICI Prudential Gold ETF

About ICICI Prudential Gold ETF

• ICICI Prudential Gold ETF is an open-ended scheme offered by the ICICI Prudential Mutual Fund House.
• The ETF tracks the performance of physical gold in the domestic market. It belongs to the commodities: gold category of funds.
• The fund was launched on August 24, 2010.
• Gaurav Chikane is the fund manager for ICICI Prudential Gold ETF.
• Investment in this ETF can be made through a demat account with a registered broker or financial institution.
• ICICI Prudential Gold ETF units can be bought and sold, just like equities, during the usual trading window of the stock market.

Investment Objective & Benchmark

• The objective of the scheme is to offer investment returns that closely correspond to the performance of domestic prices of gold.
• The ETF is benchmarked against domestic prices of gold derived from the London Bullion Market Association (LBMA) AM fixing prices.
• It offers a cost-effective alternative to investment in gold without physically acquiring it. Liquidating physical gold can be more time-consuming and less convenient in comparison to the ETF.
• Passively managed, the fund may also participate in exchange-traded commodity Derivatives (ETCDs) with gold as underlying.
• One big advantage of investment in gold ETF over physical gold is the fact that investors can easily monitor the price and consequently the performance of their holdings.
• Physical gold also incurs other costs including making charges, storage charges and dealer premiums. Gold ETF frees investors from these hassles.
• Gold retains its value not only in times of financial uncertainty. It is often called the “crisis commodity” because investors prefer its relative safety in times of financial and geopolitical uncertainty.
• Gold is less volatile compared to equity stocks, making it a safer option for investors looking to earn stable returns.
• Categorised in the high-risk investment group, this ETF is best suited for investors looking at a medium to long-term goal.

Asset Allocation & Portfolio Composition

• The ETF has allocated 98.42% of the available funds to investment in gold. The remaining portion is investment in other type of instrument.
• The ETF has given a return of over 23% in the last one year.
• The fund has delivered a healthy CAGR of over 9% since inception with the consistent rise in the gold price.