ICICI Prudential Mutual Fund has launched an open-end Gold Fund, which will invest in ICICI Prudential Gold ETF. This will be the fifth fund of this kind.
The primary objective of the fund is to generate returns linked to the underlying scheme. The scheme will invest up to 100 per cent in the units of ICICI Prudential Gold ETF. However, it may also invest up to 5 per cent in debt & money market instruments.
Mr. Chaitanya Pande will be the fund manager. He has over 15 years of fund management experience. He has graduated from St. Stephens College, New Delhi and has done PGDM from IMI, New Delhi. He also manages ICICI Prudential Gold ETF, S.M.A.R.T. Fund, Banking & PSU Debt Fund, Regular Savings Fund, all the FMPs and all the Interval Funds.
ICICI Prudential Mutual Fund has been around for more than 16 years. Its assets under management as on June 30, 2011 are Rs 79,857 crores and it is the third largest fund house.
Scheme Launch Date Expense Ratio (%) 3-Month Returns* Reliance Gold Savings Feb-11 0.75 23.17 Kotak Gold Mar-11 0.75 23.38 Quantum Gold Savings May-11 0.50 23.46 SBI Gold Sep-11 0.75 - *Returns as on September 20, 2011.
Comparison between a Gold ETF and Gold Fund of Fund
If an investor chooses to invest Rs. 50,000 each in Gold ETF through demat mode as well as in a regular Gold Savings Fund through physical application mode. He has to incur following charges in each case. Charges ICICI Pru Gold ETF ICICI Pru Regular Gold Savings Fund Account Opening Charges Nil Nil Annual Maintenance Charges of Demat A/C Rs 0 - Rs 1200 Nil Delivery Brokerage Charges^ Rs 25 - Rs 175 Nil Transaction Charges Rs 25 Nil Annual Scheme Recurring Expenses^^ Rs 750 Rs. 750 Total Rs. 800- Rs. 2150 Rs. 750 ^Delivery brokerage charges is in the range of 0.05% to 0.35%. ^^capped at 1.50% under both options
If you want to invest in gold, you may invest 5 to 10 per cent of your overall portfolio in such a regular gold savings fund. However, one should keep in mind when to get out of such a fund whenever the prices start to decline.. Hence, ensuring a stop loss in such an investment becomes very important.
NFO Opens: September 20, 2011 NFO Closes: October 4, 2011 NFO Price: Rs.10 Options: Growth and Dividend Minimum Application Amount: Rs.5000/- and in multiples of Re.1 thereafter Exit Load: 2% if redeemed/switched-out on or before 1 year from the date of allotment and NIL after 1 year. Benchmark: Domestic Price of Gold Fund Manager: Mr. Chaitanya Pande