A Fund of Funds scheme from the stable of Birla Sun Life Mutual Fund investing in BSL Gold ETF.

Summary

Type	Open-ended gold fund of fund	Benchmark Index	Domestic Price of Gold
Min. Investment: Additional Investment: Min. Step-up SIP	Rs 5,000 (for lump sum) and in multiples of Rs 1 thereafter. Rs 1000 (for monthly SIP, minimum 6 instalments) Rs 1000 Rs 500	Face Value	Rs 10 per unit
Entry Load	Nil	Exit Load *	2% is payable if units are redeemed / switched-out within 365 days from the date of allotment. No exit loan is payable thereafter.
Issue Opens	March 01, 2012	Issue Closes	March 15, 2012

Investment Objective*

“To provide returns that tracks returns provided by Birla Sun Life Gold ETF (BSL Gold ETF).”

 

*Source: Scheme Information Document

Is this fund for you?

Birla Sun Life Gold Fund (BSLGF) is the first gold fund of funds scheme from Birla Sun Life Mutual Fund. The fund will invest its corpus in BSL Gold ETF (BSLGE). The Fund is launched especially considering the requirements of those who want to buy gold in a paper form but do not have a Demat account. Unlike ETFs, you don’t need to maintain any Demat account to invest in BSLGF.

The fund is mandated to allocate its assets as under:

Type of Instrument	% of Net Asset	Risk Profile
Units of BSL Gold ETF	95 % - 100 %	Medium
Money Market Instruments	0 % - 5 %	Low to Medium

(Source: Scheme Information Document)

 

Fund Manager Profile

BSLGF will be managed by Mr. Satyabrata Mohanty. He is the Head of Mixed Assets at Birla Sun Life Mutual Fund. He is a Commerce Graduate, a Chartered Accountant and has to his credit a degree of CFA. He has the experience of more than 12 years. Prior to joining Birla Sun Life Mutual Fund, Mr. Mohanty was associated with Aditya Birla Corporation Management Ltd.

 

Fund Outlook

Launch of BSLGF has come at the time when gold prices have come off from their all-time high and the yellow metal is in its consolidation phase. However, given that the European sovereign debt crisis is far from over and sustained weakness in US dollar appears to be more a structural problem; we expect gold prices to remain firm. This may not be the right time to go aggressive on buying gold but it may not be a bad idea either to buy gold periodically in smaller quantities (at PersonalFN, we recommend investors to have at least 5%-10% of their portfolio in Gold.). Moreover, the asset allocation mandate of the fund will bind the fund manager to allocate at least 95% of the assets in BSLGE in order to keep the tracking error to the minimum. One should be watchful over any favourable news on macro economic front of developed economies which might prove to be a bearish signal for the current secular gold bull market. However if situation in the west worsens then gold might move further up.

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