SBI Gold Fund

An Open ended Fund of Fund Scheme

Summary

Type	Open-ended gold fund of fund.	Benchmark Index	Domestic Price of Gold
Min. Investment Add. Investment	5,000 (for lump sum) and in multiples of 1 thereafter. 100 (for monthly SIP, minimum 60 instalments) / 1,000	Face Value	10 per unit
Entry Load	Nil	Exit Load *	1% *
Issue Opens	August 22, 2011	Issue Closes	September 05, 2011

* An exit load of 1.0% will be charged if redeemed or switched out on or before the completion of 1 year from the date of allotment of units.

Expense Ratio: 0.75% of daily or average weekly net assets of the scheme

 

Investment Objective*

The investment objective of the scheme is “to seek to provide returns that closely correspond to the returns provided SBI Gold Exchange Traded Scheme (SBI GETS). However there is no assurance that the investment objective of the scheme will be realised and the scheme does not assure or guarantee any returns.

 

*Source: Scheme Information Document

Is this fund for you?

SBI Gold Fund (SBI GF) is the first gold fund of fund scheme from the SBI mutual fund. The fund will invest its corpus in SBI GETS. 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 SBI GF. The fund also gives you the flexibility to invest as low as 100 p.m. through SIP

 

The fund is mandated to allocate its assets as under:

Type of Instrument	% of Net Asset	Risk Profile
Units of SBI GETS	95 % - 100 %	Medium to High
Reverse repo and / or CBLO and / or short-term fixed deposits and / or Schemes which invests predominantly in money market securities or Liquid Schemes*	0 % - 5 %	Low to Medium

(Source: Scheme Information Document)

 

Fund Manager Profile

SBI GF will be managed by Mr. Raviprakash Sharma who is a Chartered Account (C.A.) and holds a bachelors degree in commerce and also has to his credit the degree of C.F.A. Prior to joining SBI mutual fund, Mr. Sharma was also associated with HDFC AMC, Citi group wealth advisors, Kotak securities, Times Investors Services and Birla Sun Life Securities. He has a total work experience of 12 years including 10 years of experience in portfolio management services.

 

Fund Outlook

Launch of SBI GF has come at the time when gold prices are at their all time high in India. 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 SBI GETS 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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Comments
bemoneyaware@gmail.com Aug 29, 2011 Isn't this a Fund of Funds wouldn't it be better to buy Gold ETF directly?
767703100@qq.com Sep 29, 2011 Ho ho, who wuloda thunk it, right?

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