Axis Gold and Silver Passive Fund of Fund: Worth Considering for Tactical Allocation?

Both the precious metals, gold and silver, have exhibited exceptional sheen this year.

On a year-to-date basis, in Indian rupee terms, gold has clocked an absolute return of 67.8%, whereas silver 115.4% (as of 10 December 2025, as per MCX spot prices).

In times of Trump 2.0's protectionist policies, trade wars, geopolitical tensions, fears of economic slowdown, and central banks resorting to rate cuts to support growth, gold has shown its trait of being a safe haven or a store of value.

Even central banks have bought gold, considering many of the risks, including the higher debt-to-GDP ratios of many economies.

Silver, which is not just a precious metal, is also gaining attention due to its industrial use. It's used in EV batteries, electrical conductivity, circuits, switches, solar panels, satellites, sensors, 5G technology, medicines (due to antimicrobial properties), medical instruments, chemicals, etc.

There is high demand for the white metal, outstripping supply, which is driving prices up. As per The Silver Institute, the cumulative deficit for the period 2021-25 is almost 820 million ounces (Moz).

Moreover, certain central banks - Russia, India, and Saudi Arabia - are buying silver and diversifying their reserve management strategy, recognising that silver today is both an industrial metal and a monetary asset.

[Read: Silver ETFs Rise: What are the Possible Reasons Behind It]

This year, the rally in silver has been strongest since 1979 and for gold since the end of the Bretton Woods system in 1971. With demand for these metals still appearing robust from investment as well as industrial use, the positive momentum is ongoing.

Both these asset classes have outperformed equity and debt in 2025.

Axis Gold & Silver Passive Fund of Fund

Axis Mutual Fund has introduced the Axis Gold & Silver Passive Fund of Fund (FoF).

Let's understand the characteristics and mandate of this scheme in detail.

This is an open-ended fund of funds scheme investing in units of gold and silver exchange-traded funds.

Under normal circumstances, the fund will allocate its assets as under:

Keeping the allocation between 35-65% each for gold and silver is intended to help reduce concentration risk while participating in opportunities in both metals.

Gold offers stability and acts as a hedge, while silver provides industrial-driven growth potential. Thus, combining them helps balance risk and capture trends across economic cycles.

The investment in debt & money market instruments and short-term deposits is for liquidity purposes.

The fund will not invest in:

• Securitized debt
• Securities lending & borrowing and short selling
• Debt instruments having credit enhancement /structured obligations
• Debt instruments with special features: AT1 & AT2 Bonds
• Repo and reverse repo in corporate debt securities
• Credit default swaps
• Derivatives
• Overseas securities
• REITS and InvITs

What is the Investment Objective of Axis Gold & Silver Passive FoF?

The investment objective of the scheme is to generate returns by investing in units of Gold ETFs and Silver ETFs. The fund will benchmark its performance against a 50:50 blend of the domestic price of gold and silver.

However, the performance of the scheme may differ from that of the underlying gold and silver ETFs due to tracking error in the underlying exchange-traded funds.

There is no assurance that the investment objective of the scheme will be achieved.

What is the Investment Strategy?

As per the scheme information document, to achieve the investment objective, an active investment strategy will be followed.

Based on macro/technical/fundamental factors, the fund manager shall decide allocation towards units of gold ETFs and/or silver ETFs.

The fund aims to minimise tracking error by investing in high-quality, liquid ETFs and regular rebalancing. It will invest in units of gold and silver ETFs directly or through the secondary market.

Who Will Manage the Fund?

The fund will be co-managed by Pratik Tibrewal and Aditya Pagaria.

Tibrewal has 13 years of experience in commodities trading and fund management. Currently, he manages gold mutual funds, silver ETFs of Axis Mutual Fund and manages the commodities portion of Axis Multi Asset Allocation Fund. He is a commerce and law graduate with an MBA (Finance).

Pagaria has a total of 18 years of experience in fund management, on the fixed income side. He has been with Axis Asset Management Company Ltd since August 2016, and before that, with ICICI Prudential Asset Management Company. Currently, he manages the debt portion of several schemes of Axis Mutual Fund.

Subscription Details

Axis Gold & Silver Passive FoF is available for subscription from 10 December 2025 to 22 December 2025 during the NFO period. Units will be offered at Rs 10 each during this period.

Thereafter, the scheme opens for subscription within five business days from the date of allotment.

The minimum application amount during the NFO period, for both lump sum and SIP investment, is Rs 100 and any amount thereafter.

The fund offers only the growth option to invest under the regular plan and direct plan. There is no IDCW option available.

What About the Risk and Investor Suitability?

The returns of Axis Gold & Silver Passive FoF are not guaranteed. It's classified as very high risk on the risk-o-meter.

When investing in gold and silver, the key risks are price volatility, currency risk and the global macroeconomic undercurrents.

Also, keep in mind that in the short term, silver can be more volatile than gold.

The fund is suitable for investors looking for long-term capital appreciation by having exposure to gold and silver for tactical allocation or diversification with a single fund.

How Will Capital Gains be Taxed?

As a resident individual, if your holding period is less than or equal to 24 months, called Short Term Capital Gain (STCG) in this case, it will be taxed as per your applicable income-tax slab rate.

For the units that are sold after 24 months, classified as Long Term Capital Gains (LTCG) in this case, it will be taxed at 12.5% without indexation benefit.

Should You Consider Axis Gold & Silver Passive FoF?

Having tactical allocation with a gold and silver fund of funds, potentially, shall serve as an inflation hedge with gold and benefit from the industrial-driven growth potential of silver. Combining the two asset classes also helps balance risk and capture trends across economic cycles.

Investors potentially benefit from diversification with dynamic range balancing, low maintenance, and better liquidity compared to buying physical metals.

However, you need to focus on asset allocation. An aggressive investor may allocate 5-10% to gold and silver FoF, whereas a moderately conservative investor may have around 10-15% allocation. That said, you need to have a longer time horizon - at least 5 years or more.

Invest thoughtfully, considering your risk profile, broader investment objective, time horizon, and the asset allocation best suited for you.

If you are not sure how to go about it, reach out to a SEBI-registered investment adviser.

Be a thoughtful investor.

Happy investing.

Disclaimer: This write-up is for information purposes and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme-related documents carefully. Registration granted by SEBI, enlistment as IA with Exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.