Angel One AMC Gains SEBI Approval for Gold ETF NFO; Launch Imminent

Angel One Asset Management Company (AMC), backed by Angel One Ltd., has received the green light from SEBI to launch a new Gold Exchange-Traded Fund (ETF). This open-ended ETF will replicate domestic gold prices, offering both retail and institutional investors a cost-effective, highly liquid alternative to traditional physical gold investment.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

What This Gold ETF Offers

Key features announced:

• Scheme Name: Angel One Gold ETF — an open-ended ETF.
• It mirrors the local price of physical gold, giving investors exposure without owning physical bars.
• Face Value: Rupees 10 per unit.
• Minimum NFO subscription: ₹1,000 (then in ₹1 multiples).
• Fund Managers: Mehul Dama and Kewal Shah.
• No exit load, meaning investors can redeem without penalties.

How the Fund Allocates Capital

The fund is designed to invest 95%–100% of its corpus in physical gold and related instruments. The remaining 0%–5% may be held in cash or money market instruments to maintain liquidity.

Under SEBI rules:

• Investment in the Gold Monetisation Scheme (GMS) is capped at 20% of net asset value (NAV).
• Combined exposure to GMS and exchange-traded commodity derivatives (ETCDs) cannot exceed 50% of NAV.

Transparent and Cost-Efficient Fund Design

The scheme prioritises clarity and cost control:

• Total Expense Ratio (TER): capped at 1.00% per annum.
• Tracking error: limited to no more than 2% annually under normal market conditions.
• NAV transparency: The fund will publish its NAV by 11:00 p.m. daily on AMFI and AMC websites.
• Indicative NAV (iNAV) and real-time tracking difference will be visible on stock exchanges during trading hours.

Liquidity Tailored for Different Investors

Retail participants can buy or sell ETF units on NSE in multiples of one.
Large investors, market makers, or institutions can transact directly in bulk through creation units, each of 10,20,000 units.
The fund also allows direct redemption without an exit load if the ETF has traded persistently below NAV or if liquidity dries up on the exchange.

NFO Timing and Minimum Target

While the ETF has secured SEBI clearance, its NFO launch dates are pending. Before allotment, the scheme must gather at least ₹5 crore. If this threshold isn’t reached, investors will receive refunds within five working days of the NFO’s close.

Strategic Move for Angel One AMC

The Gold ETF will bolster Angel One AMC’s growing passive product line-up. The firm, established in 2023, has already rolled out equity index and liquid ETFs. This gold offering marks its entry into commodity-linked ETFs.

By eliminating hassles like storage, purity checks, or insurance, the fund hopes to attract modern investors seeking low-cost and digital-first solutions tied to India’s long-standing affinity for gold.

Conclusion

Angel One AMC is well-positioned to launch a strong and user-friendly gold exchange-traded fund.  Its design, which has been approved by SEBI, strives for transparency, affordability, and liquidity, making gold investing easier than ever.  The Gold ETF has the potential to be a useful replacement for actual gold in the portfolios of Indian investors with careful preparation and clear parameters.