SBI Gold Fund: With minimum investment of Rs 100

Mutual Funds

oi-Monika Nihalani

By Monika Nihalani

Published: Wednesday, August 24, 2011, 11:43 [IST]

SBI Mutual Fund, one of India's largest mutual fund houses has launched SBI Gold Fund on August 22, 2011. It's an open-ended fund which will enable the common man to invest systematically in gold and take advantage of the current rally of gold.

The NFO period is opened from August 22, 2011 to September 5, 2011.

The fund is especially designed for small investors who can invest through a Systematic Investment Plan (SIP) as per their convenience. The minimum denomination of investment is kept as Rs 100, which is very affordable for a common man.

The investment objective of the Scheme is to seek to provide returns that closely correspond to
returns provided by SBI Gold Exchange Traded Scheme (SBI GETS).

The scheme will allocate upto 95-100% of assets in Units of SBI GETS with medium to high risk profile. It would further invest 0-5% in Reverse repo and /or CBLO and/or 5% 0% Low to medium short-term fixed deposits and/or Schemes which invest predominantly in the money market securities or Liquid Schemes with low to medium risk profile.

Speaking at the launch of Gold Fund, Mr. Deepak Chatterjee, Managing Director, SBI Mutual Fund said, “We at SBI Mutual Fund have always believed in offering the best of products at the right time considering customer needs. In the current equity turmoil, we believe that SBI Gold Fund should certainly be one of the best investment opportunities under consideration for the common man to hedge their risks. It's a convenient product and will give an opportunity to an investor to invest in the purest form of gold without the need of buying and storing physical gold that too without a Demat account, unlike in case of Gold ETFs."

Mr. Navneet Munot, Chief Investment Officer also added saying, “Given the uncertainties in the global economic environment, gold as an asset class offers an excellent hedge. It has also been one of the best performing asset class over the last 10 years. SBI Gold fund with its underlying investment in SBI GETS provides opportunity to participate in this asset class through Systematic Investment plan. We believe SIP through SBI Gold fund is the most efficient way of owning this asset. It is an interesting option to enhance portfolio diversification".

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