IDBI Mutual Fund launches IDBI Gold Fund | Gold - Personal Finance

Gold is attracting lots of investment and buyers. Everybody is considering buying gold or a product involving Gold. Should you buy? And so it is also attracting Fund Managers to create a financial product around Gold. We already have over 11 Gold ETFs in India. Other Gold Funds in India has been reviewed too.

So IDBI Mutual Fund is launching a Gold Fund to cater to this growing demand for Gold products. Infact, they already have a Gold ETF. Here are the highlights of the Gold Fund:

? An open ended fund of funds scheme.

? Investment through lumpsum or accumulation by way of Systematic Investment Plan (SIP).

? Minimum investment in lumpsum is Rs.5000 and by SIP is Rs.500/- per month

? No requirement of a Demat account

? SIP, STP and SWP facilities available

? The fund will invest predominantly in IDBI Gold Exchange Traded Fund, which tracks the price of Gold.

?

? Benchmark ? Domestic price of gold

? NFO Period: July 25, 2012 to August 08, 2012.

The scheme offers facility to invest in gold by way of lumpsum investment or accumulation through regular SIP.

The New Fund Offer (NFO) will open for subscription on July 25, 2012 and close on August 08, 2012. The units will be available at par (Rs.10/-) during the NFO and at NAV related prices thereafter. The scheme will re-open for continuous sale and repurchase from August 23, 2012.

The investment objective of the scheme is to generate returns that correspond closely to the returns generated by IDBI Gold Exchange Traded Fund (IDBI Gold ETF).

The new Gold Fund will have higher expense ratio than the existing Funds as SEBI has allowed addition to the existing expense ratio by 25 basis points. So while MFs were allowed 2.5 % as expense ratio, now they can charge upto 3% that adds to the burden of the investor.

And ETFs have a still lower cost for the investor. Some ETFs have expense ratio of around 1% only.

We don't know what kind of advisors would recommend this product. Of course, those who give free advice! (Cost of free advice)

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Source: http://personalfinance201.com/Gold/idbi-mutual-fund-launches-idbi-gold-fund.html

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