Religare Mutual Fund has announced the launch of its new fund Religare Gold Exchange Traded Fund, an open ended Gold Exchange Traded Fund.
The fund is benchmarked to the price of gold and one unit of the Religare Gold ETF will represent 1 gram of gold.
The scheme seeks to generate returns that closely correspond to the returns provided by investment in physical gold in the domestic market, though it may be subject to a tracking error.
Religare said the fund would be managed passively with investments in physical gold and will endeavor to track the performance and yield of its underlying asset ie gold. Investments in physical gold will be made regardless of any investment merit.
The fund intends to follow a fully invested approach and will have a minimum exposure of 90 per cent of its assets in gold and gold bullion at all times.
The fund may buy and sell gold at different points of time during the trading session, which may or may not correspond to the closing price of gold, maintain cash to meet its liquidity requirement, which may result in the scheme having a tracking error and to that extent its performance may not be commensurate with the performance of its underlying asset.