IDBI Gold Fund

An Open ended Fund of Funds Scheme

Summary

Type	Open-ended gold fund of funds	Benchmark Index	Domestic Price of Gold
Min. Investment: Additional Investment:	Rs 5,000 (for lump sum) and in multiples of Rs 1 thereafter. Rs 500 (for monthly SIP, minimum 12 instalments) Rs 1,000 (for monthly SIP, minimum 6 instalments) Rs 1,500 (for quarterly SIP, minimum 4 quarters) Rs 1,000	Exit Load	1% is payable if units are redeemed / switched-out within 12 months from the date of allotment. No exit load is payable thereafter.
Entry Load	Nil	Face Value	Rs 10 per unit
Issue Opens	July 25, 2012	Issue Closes	August 08, 2012

 

Investment Objective*

“To generate returns that correspond closely to the returns generated by IDBI Gold Exchange Traded Fund (IDBI GOLD ETF).”

 

(Source: Scheme Information Document)

 

Is this fund for you?

IDBI Gold Fund (IGF) is the first gold fund of funds scheme from IDBI Mutual Fund. The fund will invest its corpus in IDBI Gold ETF. 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 in case of ETFs, one doesn’t need to maintain any Demat account to invest in IGF. The fund also gives you the flexibility to invest as low as Rs 500 per month through SIP.

The fund is mandated to allocate its assets as under:

Type of Instrument	% of Net Asset	Risk Profile
Units of IDBI Gold Exchange Traded Fund	95 % - 100 %	High
Reverse Repo/ Short-Term Fixed Deposits/ Money Market Instruments and in IDBI Liquid Fund Scheme of IDBI Mutual Fund	0 % - 5 %	Low to Medium

(Source: Scheme Information Document)

 

Fund Manager Profile

The IDBI Gold Fund will be managed by Mr V Balasubramanian. Mr Balasubramanian is a Post Graduate in Commerce and also has to his credit CAIIB. Mr Balasubramanian brings with him 32 years of experience out of which 14 years in mutual fund industry and 16 years in banking. Prior to joining IDBI Mutual Fund; Mr Balasubramanian was associated with Indian Bank as a Senior Manager of the Treasury branch. At present, Mr Balasubramanian also manages IDBI Nifty Index Fund, IDBI Nifty Junior Index Fund, IDBI Monthly Income Plan (Equity), IDBI Gold Exchange Traded Fund, IDBI Top 100 Equity Fund.

 

Fund Outlook

Launch of IGF has come at the time when gold prices are off from their all-time high in the international market. However in India, the gold is reaching new highs. The weakness in Rupee against US dollar reflects in the firm gold prices. Gold is providing a good hedge against the adverse rupee movement protecting the purchasing power of investors in the international markets. The fund will benefit if the gold continues its northward journey. Cross currency movement will be captured in the gold prices. However, if the developed nations manifest faster growth which is unlikely in the midst of burgeoning debt crisis and high unemployment gold prices may witness some consolidation. Investors’ investing in gold with an intention to make a quick buck in a short while may have to face disappointment.

 

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