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MFs Bank For Glitter On Gold ETFs This Diwali

Monday, October 24, 2011
By Anand Birai

In a man-to-man conversation, when one shows his worry of his wife loving the gold and him loving the savings more, his friend hits the nail by advising him to invest in a gold mutual fund and gift it to wife. This is an advertisement by a mutual fund company on the radio. It might not sound quite realistic in Indian environment wherein purchase or investment in physical gold is irreplaceable for various reasons. The gold prices have been volatile, number of commodity investors in gold is increasing, the number of investors buying gold exchange traded funds (ETFs) is increasing, yet, it is a debatable issue if a wife would accept a Gold ETF in lieu of physical gold from husband.

Catching on the festive sentiments rightly, the mutual funds in India prefer to bet safe on Gold Exchange Traded Funds (ETFs) for past few days. The campaigns are on TV, radio and print media. The prices of gold are going out of the reach of consumers and mutual funds are not left with any other attractive product around. The markets are sluggish, interest rates are increasing and so the inflation also. The MF industry looks like banking upon the Gold ETFs for some glitter in its business.

But besides, the point is the fact that the Gold ETFs have been the best among the lot of other mutual fund investment options. Recently, Axis Mutual Fund launched a Gold ETF and ICICI Prudential Mutual Fund launched a fund of Gold ETF and new fund offers (NFOs) of Gold ETFs from HDFC and IDBI closed on Friday. The buzz of Gold ETFs is considerable owing to the fact that it has been selling consistently and also giving returns.

Reliance Gold ETF (Dividend) tops the chart of returns on one year basis. When the SBI Magnum Sector Funds is at top of the list among equity funds with 1.07% return over a year, top debt and liquid funds are with 14.69% and 10.13% respectively, ELSS, balanced and index funds are in negative territory at -4.9%, -1.89% and -12.33% respectively, glittering is the gold ETF of Reliance with 34.6% as per the figures of Association of Mutual Funds in India (AMFI) as on Thursday. Nonetheless, 9 out of top 10 ETFs are Gold ETFs with one year return being over 30%.

Hence, the bottom-line is the one who had invested in Gold ETFs over past year would have one more reason to celebrate a cheerful Diwali this year.

MF UPDATE
Deutsche MF announces bonus under DWS Ultra Short Term Fund  

Deutsche Mutual Fund has announced bonus under DWS Ultra Short Term Fund – Regular Plan – Bonus Option. Accordingly, the bonus units will be 2.16 units for every 10 units held. The investment objective of the scheme is to provide liquidity and generate stable returns by investing in a mix of short term debt and money market instruments. The record date for the bonus issue is 24th October 2011.

ICICI Prudential MF launches ICICI Prudential Multiple Yield Fund - Plan E  

ICICI Prudential Mutual Fund has launched a new fund namely, ICICI Prudential Multiple Yield Fund - Plan E, a close ended income fund with tenure of 1100 days. The new issue will be open for subscription from 28th October to 9th November 2011, at an offer price of Rs. 10 per unit. The primary objective of the scheme is to seek to generate returns by investing in a portfolio of fixed income securities/ debt instruments. No exit load will be charged under the scheme. The performance of the scheme will be benchmarked against CRISIL MIP Blended Index. The scheme will be jointly managed by Chaitanya Pande (for debt portion) and Mrinal Singh (for equity portion). The investments of the scheme in ADR/GDR and other foreign securities will be handled by Rajat Chandak.

Sundaram MF launches Sundaram Capital Protection Oriented Fund 5 Years (Series 3)  

Sundaram Mutual Fund has launched a new fund namely, Sundaram Capital Protection Oriented Fund 5 Years (Series 3), a close ended capital protection oriented scheme. The new issue will be open for subscription from 18th October to 31st October 2011, at an offer price of Rs. 10 per unit. The investment objective of this scheme would be to seek income and minimise risk of capital loss by investing in a portfolio of fixed income securities. The scheme may invest a part of the assets in equity to seek capital appreciation. No exit load will be charged under the scheme. The performance of the scheme will be benchmarked against Crisil MIP Blended Index. The scheme will be jointly managed by Dwijendra Srivastava (for debt portion) and Srividhya Rajesh (for equity portion).

DSP BlackRock MF Starts Charging Distributor/Agents Fee  

DSP Blackrock Mutual Fund will start deducting the distributors/agents fee (Transaction Charges) of Rs. 150 and Rs. 100 from first time Mutual Fund investor and exiting investors, respectively, with effect from November 1, 2011. However, there will be no transaction charges if the investment amount is less than Rs. 10,000 purchases made without any distributor or agent, transaction carried out on Stock Exchange Platforms.

Principal MF announces change in the name of its schemes  

Principal Mutual fund has announced to change in the name of its two schemes namely, Principal Monthly Income Plan and Principal Money Manager Fund, with effect from 21st October 2011. Principal Monthly Income Plan & MIP Plus has been renamed to Principal Debt Savings Fund (An open-ended Income Fund) and Retail Plan respectively. Accordingly, the fund house has revised structure of an exit load under Principal Debt Savings Fund and Retail Plan as 0.50% if units are redeemed or switched out on or before 91 days from the date of allotment. Further, the name of Principal Money Manager Fund has been renamed to Principal Retail Money Manager Fund.

Kotak MF declares dividend under Kotak FMP 370 Days Series 9  
Kotak Mutual Fund has declared dividend Kotak FMP 370 Days Series 9, on the face value of Rs. 10 per unit. The quantum of dividend will be entire appreciation in Net Asset Value of dividend option until 25 October 2011. The investment objective of the scheme is to generate returns though investments in debt and money market instruments with a view to significantly reduce the interest rate risk. The record date for dividend distribution is 25th October 2011.

NEW FUND OFFERS

Name    Open Date    Close Date

ICICI Pru Multiple Yield-Plan E (D)    28-10-11    9/11/2011   
ICICI Pru Multiple Yield-Plan E (G)    28-10-11    9/11/2011   
IDBI Gold Exchange Traded Fund    19-10-11    2/11/2011   
Sundaram CPOF- Sr 3 -5 yrs (D)    18-10-11    31-10-11   
Sundaram CPOF- Sr 3 -5 yrs (G)    18-10-11    31-10-11   

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