Axis Gold and Silver Passive FOF: Combining the stability of gold and the potential of silver

Gold and silver have been considered auspicious commodities since time immemorial. In Indian culture gold is a symbol of purity, fortune and wealth. Apart from its cultural significance, the precious metals have immense importance as financial assets. In this article, we will review the Axis Gold & Silver Passive FOF NFO which opened its subscription on 10^th December 2025. The NFO will remain open till the 22^nd of December 2025.

Why should you invest in Gold and Silver?

• India is one of the largest markets of gold in the world. Indian families buy gold on auspicious occasions like Akshay Tritiya, Dhanteras, Deepawali, weddings etc. With rising affluence demand of gold is increasing in India.


• Gold and silver are seen as stores of value since their value increases over time. Gold and silver can be used as hedge against inflation. Both the asset classes have the potential to beating inflation in the long term. Over the past two decades gold has delivered exceptional long-term returns rising 17 times from around Rs 7,400 in November 2005 to over Rs 1.3 lakhs in November 2025. In the last 20 years silver’s price jumped from about Rs 12,500/per kg in November 2005 to Rs 1.79 lakhs per kg in November 2025, a more than 14-fold increase amid significant volatility.
  
  

  

  Source: Advisorkhoj Research, Data from Nov 2005 to Nov 2025

  
  

  Hence you should buy gold and silver for investment purposes. But instead of buying gold and silver as bullion (e.g., bars, ingots, coins etc.) which involves storage costs (e.g., bank locker fees), you should invest in Gold and Silver ETFs which are much more cost-efficient investments.

• Gold is considered as safe-haven during market volatility: Due to gold's minimal correlation with numerous traditional markets, it has traditionally delivered positive returns during periods of significant volatility and market distress, leading many investors to regard it as a perceived safe-haven. Historically, gold has exhibited outperformance to equity when markets turn volatile.
  
  

  

  Source: Advisorkhoj Research



• Silver is a scarce commodity. In certain parts of the world, silver ore is even more scarce than gold. With supply constraints and rising demand, silver price will continue to rise in the long term even though silver may be more volatile than gold in the short term.
  
  

  

  Source: Axis MF Product presentation:https://silverinstitute.org/wp-content/uploads/2025/04/World_Silver_Survey-2025.pdf



• Silver is essential in many electronic devices and semiconductor applications
  
  

  

  Source: Axis AMC product presentation. https://www.usgs.gov/news/science-snippet/interior-department-releases-final-2025-list-critical-minerals



• Indian parents usually gift gold to their children, daughters-in-law and sons-in-law on the occasion of their wedding. Many parents start buying gold for their children’s weddings from an early age. Instead of buying gold jewellery, which invariably contains impurities, you should invest systematically in gold ETFs which represent a certain weight of pure 24 carat gold. Investing in gold funds can aid future access to physical gold or jewellery, since at the time of your children’s wedding, you can redeem the gold ETF and use the proceeds to purchase gold jewellery as per your children’s preferences without any deduction for impurities. See the chart below that shows how an SIP of Rs 10,000/- can accumulate gold for you over long timelines.
  
  

  

  Source: Advisorkhoj Research, as on 30^th November 2025



• When you store your gold jewellery in a bank locker, a fee is debited every year from your savings bank account. There are no storage costs if you invest in gold ETFs. As such, gold ETFs are much more cost-efficient investments compared to physical gold.


• Along with gold, silver is also considered to be an auspicious metal in India. Apart from its use in jewellery, silver is also used in heavy and new age industries (e.g., solar panels, electric vehicles, smartphones etc). With development of new age technology, the demand for silver is rising but supply is constrained. You should consider investing in silver as an asset class since it has the potential of generating capital appreciation for you over long investment horizons.


• Spreading your investments over multiple asset classes (i.e., asset allocation) will diversify / reduce your portfolio risks. Both gold and silver can be used for your asset allocation purposes. Gold and silver have low correlation with equities. Gold is usually counter-cyclical to equities. It can bring stability to your portfolio in different investment cycles. Silver usually outperforms gold in bull-markets. Hence it can add further diversification to your investment portfolio.

Axis Gold and Silver Passive FOF

The Axis Gold and Silver Passive FOF will invest a minimum of 35% in gold and silver ETFs each. The Fund Manager will determine the incremental allocation between Gold ETFs and Silver ETFs based on macroeconomic, technical, and fundamental analysis. The managers for this FOF are Pratik Tibrewal and Aditya Pagaria.

Portfolio construct:

Why invest in gold and silver FOFs?

• Cost efficiency: There are making charges, impurities or storage charges in ETFs, making them much more cost effective than physical gold.


• Lower capital outlay: Investing in gold or silver in jewellery may require considerable capital outlay, especially if you are investing in gold. On the other hand, you can buy just one or more units of gold or silver ETFs. In case of FOFs, the minimum investment amount is just Rs 100. With gold / silver ETFs and FOFs, you can start accumulating gold and silver over a long period of time.


• High liquidity: You can sell your gold or silver ETF units any time during market hours in the stock exchange at prevailing market prices through your trading account. If you have gold or silver FOFs, you can redeem units of the FOFs with the asset management company (AMC) at prevailing Net Asset Values* (NAVs).


• High security: There is no risk of impurities or theft. Gold and silver ETFs are backed by physical metals of highest purity standards as mandated by SEBI.


• Highly convenient: You can buy or sell / redeem, gold and silver ETFs / FOFs from the comfort of your home through a click of a few buttons on your PC or mobile application. You can invest in gold / silver FOFs from your regular savings through Systematic Investment Plan (SIP)


• Timing Gold and Silver can be challenging: Although both gold and silver offer distinct advantages for inclusion in a portfolio, determining the appropriate allocation can be complex for investors and advisors. The chart below shows the 1 year rolling returns of gold and silver over the last 10 years. Though gold and silver returns are correlated, they outperform each other due to the several factors influencing their price performance. FOFs are managed by experienced fund managers eliminating the load of timing the markets for investors.
  
  

  

  Source: Advisorkhoj Research, as on 30^th November 2025

Why invest in gold and silver now?

• Global central banks have doubled their gold purchases since 2022: In recent years central banks, particularly those that are from emerging economies such as China, India and Turkey, have significantly increased their gold purchases. Their goal is to lessen their dependence on the U.S. dollar and manage currency risk, positioning gold as a favoured reserve. This substantial buying activity drives strong demand, elevating prices and reflecting the trust in gold’s role as a safe haven investment.
  
  

  

  Source: Axis MF product presentation, IMF



• Fed Rate Cuts Often Trigger Gold Price Rallies: The recent Fed rate cuts may pave the way for rally in gold to continue. Gold pays no interest. When the Fed cuts rates, yields on bonds and cash fall, making gold more attractive compared to US Treasury Bonds. Rate cuts typically puts pressure on the USD. Since gold is priced in USD globally, a weaker dollar boosts demand and price.
  
  

  

  Source: Axis MF product presentation gold spot prices MCX. Data as on 31^st Oct 2025



• Tariffs war and their impact on inflation: US imposed tariff on various trade partners, China and India were the worst impacted, with tariff close to 50%. Tariff announcements and trade tensions (e.g., U.S. tariffs in early 2025) added to uncertainty, supporting gold prices.

Who should invest in Axis Gold and Silver Passive FOF?

• Investors looking to reduce their downside risks in market downturns.


• Investors looking for cost efficient and liquid alternative investment options to physical gold and silver.


• Investors who are prepared for short term volatility


• Investors who have sufficiently long investment horizons.

Consult your financial advisor or mutual fund distributor to understand if the Axis Gold and Silver Passive FOF aligns with your investment objectives.