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Tata Asset Management has launched four passive funds to attract fresh investments.
It has floated new fund offers of two Exchange Traded Funds (ETFs) and two Fund of Funds (FoFs). Tata Gold ETF, an open-ended ETF, will replicate domestic price of gold. The NFO closes on January 9.
Tata Gold ETF Fund of Fund, an open-ended FoF scheme, will invest in Tata Gold ETF. The NFO closes on January 16.
Tata Silver ETF, an open-ended ETF will replicate domestic price of silver and the NFO closes January 9. The Tata Silver ETF Fund of Fund, an open-ended FoF scheme will invest in Tata Silver ETF and the NFO closes on January 16.
The fund house’s total passive asset under management is worth ₹3,500 crore, split between ₹2500-2,600 crore in debt and the remaining in equity.
To diversify portfolio
Anand Vardarajan, Business Head — Institutional Clients, Banking, Alternate Investments and Product Strategy at Tata Asset Management said the passive fund launches will give clients an opportunity to diversify their portfolio in these volatile times.
Asked whether the fund house is launching the passive funds because it thinks the equity market is over-valued, he said markets tend to move and discount future news today. Equity markets have risen very sharply but it cannot be said there are no opportunities in equity markets. “If an investor thinks markets are looking fairly valued at this time and they are looking for other avenues or places to hide, I think gold and silver, to that extent, will provide him/her a shelter and this is not a reflection of any discomfort with equity markets,” he said.
Gold’s role as a hedge against currency devaluation, inflation, and market uncertainties, coupled with its scarcity and historical safe-haven status helps one to preserve wealth effectively. Meanwhile, silver’s surging demand in industries like EV technology and green energy, amidst a supply shortage, signals potential price appreciation. As silver is mostly a byproduct, its scarcity and expanding industrial uses make it an appealing investment.
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