I am investing in DSPBR World Gold Fund through SIP. Its NAV has drastically reduced by 50% in the last 5 months. Should I continue my SIP in this fund?
Manoj Kumar Sant
Ans. Being a themeatic fund DSPBR World Gold Fund could be a risky bet. This fund’s exposure is in companies related to gold mining and related business through overseas funds. The fund had a good run initially. Since its launch in August 2007 and had gained 63 percent till March 2008. But, it has lost all its gains in the recent global market melt down and is lingering in the negative zone. As on October 20, 2008 its NAV (Rs 8.01) was below its face value.
If it is the only fund you own then it would be better to replace it with a diversified equity fund or balanced fund. Theme based funds should not be a core holding in one’s portfolio. If this fund is a small part of your total investment then you can continue with it as an additional diversification avenue.