Kotak Gold Silver Passive FOF Opens on 6 October: A Dual Precious Metals Investment Opportunity

The Kotak Gold Silver Passive FOF is a newly launched open-ended fund of fund (FoF) scheme by Kotak Mahindra Mutual Fund, opening for subscription on 6 October 2025 and closing on 20 October 2025. It aims to provide long-term capital appreciation by investing in units of the Kotak Gold ETF and Kotak Silver ETF. By offering exposure to both gold and silver, this NFO allows investors to benefit from diversification across precious metals, which often perform well in uncertain economic conditions. With a low minimum investment of ₹100, zero exit load, and a passive strategy, this NFO is suitable for investors looking for a low-cost way to gain dual asset exposure through a single investment route.

Key Features of Kotak Gold Silver Passive FOF

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• Opening Date: October 6, 2025
• Closing Date: October 20,  2025
• Exit Load: Nil
• Minimum Investment: ₹100 and any amount thereafter

Objective of Kotak Gold Silver Passive FOF

The primary objective of the Kotak Gold Silver Passive FOF - Direct (G) is to generate long-term capital appreciation by investing in a mix of Kotak Gold ETF and Kotak Silver ETF. However, there is no guarantee that the investment objective will be achieved.

Investment Strategy of Kotak Gold Silver Passive FOF

• Passive investment approach, mirroring the performance of underlying gold and silver ETFs.
• Allocation determined using an in-house model based on gold and silver price movements.
• Flexibility for fund managers to adjust weights based on macroeconomic indicators.
• May invest in money market instruments and debt mutual fund units to manage liquidity.
• Focuses on optimising risk-adjusted returns with minimal portfolio churn.

Risks Associated with Kotak Gold Silver Passive FOF

• The scheme’s performance depends on the underlying Gold and Silver ETFs, which may fluctuate due to market volatility.
• Investors will bear dual expenses—of this fund and the underlying schemes—potentially lowering net returns.
• NAV may vary from actual gold/silver values due to market premiums/discounts.
• Commodity prices are influenced by demand-supply, exchange rates, and global macroeconomic factors.
• Any redemption delays in the underlying ETFs may cause payment deferrals to investors.

Risk Mitigation Strategy by Kotak Gold Silver Passive FOF

The NFO aims to manage risks by maintaining a primarily passive allocation to physical gold and silver via ETFs, minimising manager bias. The debt and cash components will be parked in short-term, highly liquid money market instruments, Liquid or Overnight schemes, mitigating credit, reinvestment, and interest rate risks. For liquidity, redemptions are expected to be managed via cash realisation from the ETFs. Additionally, the fund will follow internal models and discretion for ETF allocation based on macroeconomic trends to adjust exposures appropriately and reduce concentration risk.

What Type of Investor Should Invest in Kotak Gold Silver Passive FOF?

• Investors seeking long-term capital appreciation with exposure to precious metals.
• Individuals looking to diversify their portfolio beyond equities and fixed income.
• Conservative investors prefer passive, cost-effective strategies with no exit load.
• Those wishing to hedge their portfolio against inflation and currency depreciation.

Where Will Kotak Gold Silver Passive FOF Invest?

• Units of Kotak Gold ETF for gold price exposure.
• Units of Kotak Silver ETF for silver price exposure.
• Money market instruments and debt mutual funds are primarily for liquidity management and redemptions.
• The portfolio will indirectly hold physical gold and silver, aligning with market prices.