Kotak Mahindra Asset Management Company, one of India’s leading mutual
fund houses, on Thursday announced the launch of its latest
fund-of-funds named ‘Kotak Gold Fund’. This unique open-ended fund will
enable investors to take exposure to gold without having a demat
account. In addition to this, Kotak AMC will offer investors the option
to invest as little as Rs 1,000 per month through the SIP route.
The Kotak Gold Fund will be open for subscription from March 4 to 18 and
its performance will be benchmarked against the prices of physical
gold.
Speaking about the need for this product, Kotak Mahindra Asset
Management Company CEO Sandesh Kirkire said, “We see a lot of potential
with Kotak Gold Fund primarily because of two significant factors. One
by providing a platform to investors to invest in gold without a demat
account and also create a discipline by systematically investing in Gold
as an asset class.”
“ In recent times, gold has shown a low correlation with other asset
classes while at the same time its returns potential has been similar to
equity assets performance. As a result allocation into gold improves
portfolio diversification and can minimize the downside risk of the
portfolio,” he said.
The fund attracts the benefit of long-term capital gains tax after one
year of investment. This is in contrast to physical gold where you have
to pay short term capital gains tax for a period up to three years.
Also, returns of this fund do not attract any wealth tax, which is not
the case with physical gold.