The new fund offering from Reliance is a boon for all those investors who do not have a demat account and wanted to invest in a gold ETF. This is a passively managed fund of fund that invests in the open-ended Reliance Gold Exchange Traded fund, which in turn invests in physical gold with 99.5 per cent purity. It is because of such a structure that the fund is able to offer the convenient SIP route to investors.
However, this fund comes with a rider: while the Reliance Gold ETF has no load, this fund has an exit load of 2 per cent in the first year. But the bigger problem is the recurring expense that adds up to 1.5 per cent; 1 per cent in Reliance Gold ETF and 0.5 per cent in Reliance Gold Savings Fund that investors need to be cautious about.
This is the cost of convenience that one will pay when investing in this fund instead of paying annual maintenance charges for a demat account , delivery brokerages charges, transaction charges incurred for investing through the dematerialized mode.
