First time retail investors keen on both gold and silver - two metals topping price charts this past year - should consider the Gold and Silver ETFs Fund of Funds (FoFs) to de-risk exposure.
After gold climbed 68% silver 82% in a year, financial planners believe investors should stagger their investments in these precious metals, allocate 5-10% of their portfolio to precious metals and take a five-year view.
"It is difficult for retail investors to decide how much and when to allocate to gold or silver. Such a fund that allocates to both metals puts the onus on the fund manager who is better informed to take a decision and is tax efficient for the investor," says Nikhil Gupta, founder, Sage Capital.
Precious metals offer good downside protection and tend to outperform in bear markets. While gold offers defensiveness and stability during stress, silver adds cyclical upside in reflationary or industrial-led rallies but it is difficult to time either metal independently.
"While each metal has its own story, combining gold and silver offers investors a powerful way to balance stability and growth within the commodities space," says Niranjan Avasthi, senior VP, Edelweiss Mutual Fund. Avasthi believes this makes the combination a strategically balanced allocation with gold anchoring the portfolio during uncertainty, while silver adds return potential during economic recoveries and industrial upcycles.
The combination of a gold and silver fund is offered by the likes of Motilal, Mirae, Edelweiss and Kotak, which recently concluded its new fund offer (NFO).
While Motilal, Kotak and Mirae dynamically manage the gold silver allocation, Edelweiss follows a fixed 50:50 allocation to the precious metals. Motilal Oswal currently has a 70:30 exposure to gold and silver, Mirae has a 55% allocation to silver and 45% to gold, while Edelweiss has a 50:50 allocation to the precious metals.
Fund managers ask investors to use staggered manner to invest in precious metals now, after the sharp run up.
"Expect some consolidation after a sharp run up in price. Long-term investors can allocate 10-15% of their portfolio to gold and silver and stagger their investments using SIPs," says Siddharth Srivastava, head - ETF Products and Fund Manager, Mirae Mutual Fund.
After gold climbed 68% silver 82% in a year, financial planners believe investors should stagger their investments in these precious metals, allocate 5-10% of their portfolio to precious metals and take a five-year view.
"It is difficult for retail investors to decide how much and when to allocate to gold or silver. Such a fund that allocates to both metals puts the onus on the fund manager who is better informed to take a decision and is tax efficient for the investor," says Nikhil Gupta, founder, Sage Capital.
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Precious metals offer good downside protection and tend to outperform in bear markets. While gold offers defensiveness and stability during stress, silver adds cyclical upside in reflationary or industrial-led rallies but it is difficult to time either metal independently.
"While each metal has its own story, combining gold and silver offers investors a powerful way to balance stability and growth within the commodities space," says Niranjan Avasthi, senior VP, Edelweiss Mutual Fund. Avasthi believes this makes the combination a strategically balanced allocation with gold anchoring the portfolio during uncertainty, while silver adds return potential during economic recoveries and industrial upcycles.
The combination of a gold and silver fund is offered by the likes of Motilal, Mirae, Edelweiss and Kotak, which recently concluded its new fund offer (NFO).
While Motilal, Kotak and Mirae dynamically manage the gold silver allocation, Edelweiss follows a fixed 50:50 allocation to the precious metals. Motilal Oswal currently has a 70:30 exposure to gold and silver, Mirae has a 55% allocation to silver and 45% to gold, while Edelweiss has a 50:50 allocation to the precious metals.
Fund managers ask investors to use staggered manner to invest in precious metals now, after the sharp run up.
"Expect some consolidation after a sharp run up in price. Long-term investors can allocate 10-15% of their portfolio to gold and silver and stagger their investments using SIPs," says Siddharth Srivastava, head - ETF Products and Fund Manager, Mirae Mutual Fund.
