DSP Merrill Lynch Natural Resources and New Energy Fund

Risk Profile of the Scheme: Mutual Fund investments are subject to market risks. Please read the Offer Document carefully for details on risk factors before investment.

Investment Objective The primary investment objective of the Scheme is to seek to generate capital appreciation and provide long term growth opportunities by

investing in equity and equity related securities of companies domiciled in India whose predominant economic activity is in the:-

(a) discovery, development, production, or distribution of natural resources, viz., energy, mining etc; (b) alternative energy and energy

technology sectors, with emphasis given to renewable energy, automotive and on-site power generation, energy storage and enabling energy

technologies.

The Scheme will also invest a certain portion of its corpus in the equity and equity related securities of companies domiciled overseas, which are

principally engaged in the discovery, development, production or distribution of natural resources and alternative energy and/or the units/shares

of Merrill Lynch International Investment Funds – New Energy Fund, Merrill Lynch International Investment Funds – World Energy Fund and

similar other overseas mutual fund schemes. The secondary objective is to generate consistent returns by investing in debt and money market

securities.

Asset Allocation Pattern of the Scheme

Plans and Options

Minimum Application

Amount / Number

of Units

l Systematic Investment Plan (SIP) Rs. 1,000/-. Monthly and Quarterly options (Available only in the Regular Plan and during Continuous Offer)

l Systematic Withdrawal Plan (SWP) Rs. 2,000/-. Weekly, Monthly and Quarterly options (Available only in the Regular Plan and during Continuous Offer)

l Systematic Transfer Plan (STP) Rs. 2,000/-. Weekly, Monthly and Quarterly options (Available only in the Regular Plan and during Continuous Offer)

Benchmark Index 35% BSE Oil & Gas, 30% BSE Metals, 35% MSCI World Energy (net and expressed in INR)

Dividend Policy The Trustee intends to declare annual dividend comprising substantially of net income and net capital gains. The Trustee, in its sole discretion,

may also declare interim dividends. It should be noted that actual distribution of dividends and the frequency of distribution indicated above are

provisional and will be entirely at the discretion of the Trustee.

Name of the Fund Managers Anup Maheshwari – Fund Manager who will manage the investments of the Scheme in equity and equity related securities of companies domiciled in India.

Dhawal Dalal – Fund Manager who will manage the investments of the Scheme in Indian debt and money market securities.

Aditya Merchant – Dedicated Fund Manager who will manage the overseas investments of the Scheme.

l Growth Option l Dividend Option

– Payout Dividend

– Reinvest Dividend

Plans: l Regular Plan

l Institutional Plan

Options:

l Regular Plan

l Institutional Plan

Types of Instruments Normal Allocation (% of Net Assets)

Minimum Maximum

1. Equity and Equity related Securities of companies domiciled in India, and principally engaged

in the discovery, development, production or distribution of Natural Resources and Alternative

Energy

65% 100%

2. (a) Equity and Equity related Securities of companies domiciled overseas, and principally engaged

in the discovery, development, production or distribution of Natural Resources and Alternative

Energy (b) Units/Shares of (i) Merrill Lynch International Investment Funds – New Energy Fund (ii)

Merrill Lynch International Investment Funds – World Energy Fund and (iii) Similar other overseas

mutual fund schemes

0% 35%

3. Debt and Money Market Securities 0% 20%

Entry Load@ (As a % of Rs. 10/- during NFO/Applicable

NAV during Continuous Offer)

Exit Load (As a % of Applicable NAV)

Regular Plan

2.25% : For investments

Nil : For investments >= Rs.5 crore

Institutional Plan

Nil

Regular Plan

Holding period ~

Holding period >= 6 months but ~

Holding period >= 12 months: Nil

Institutional Plan

Nil

1.00% Not Applicable Holding period

Holding period >= 2 years: Nil

Not Applicable

~ Not applicable on switch-out into DSPML World Gold Fund and any open ended equity oriented scheme/plan (other than DSPML Balanced Fund)

of the Fund, which is available for investment at the time of switch-out.

@ No entry load on direct applications, i.e. applications not routed through an agent/distributor.

No Entry Load / Exit Load will be charged on investments (including SIP transactions) by Fund of Funds Schemes.

– SIP Investments

(Applicable only in the Regular Plan

and during Continuous Offer)

Expenses of the Scheme

l Load structure

l Purchase l Additional Purchase l Repurchase

Rs. 5,000/- and multiples of Re. 1/- thereafter Rs. 1,000/- and multiples of Re. 1/- thereafter Rs. 500/-

Rs. 5 crore and multiples of Re. 1/- thereafter Rs. 5 lakh and multiples of Re. 1/- thereafter Rs. 500/-

Reliance Equity Linked Saving Fund – Series I


Investment Objective
The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equities along with income tax benefit.

Asset Allocation
Under normal circumstances, the asset allocation under the Scheme will be as follows:

Type of Security % of Corpus (indicative) Risk Profile
Equities 80 – 100 % High
Debt and Money Market Instruments Up to 20 % Low to Medium
The scheme may invest in equity shares in foreign companies, ADRs / GDRs and instruments convertible into equity shares of domestic or foreign companies and in derivatives as may be permissible under the guidelines issued by SEBI and RBI. As the scheme is governed by ELSS guidelines, such investment will be made, if the ELSS guidelines permit.

The fund managers will follow an active investment strategy taking defensive / aggressive postures depending on opportunities available at various points of time. Subject to Regulations, the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, opportunities and political & economic factors.
It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the AMC, the intention being at all times to seek to protect the interests of the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations. However, such changes at all times will comply with ELSS notifications. The asset allocation pattern will be in line with the rules and guidelines of ELSS notifications also.

Investment Pattern
Consistent with the objective of the Scheme and subject to Regulations, the corpus of the Scheme will be invested in any of the following securities.

  • The funds collected under a plan shall be invested in equities, cumulative convertible preference shares and fully convertible debentures and bonds of companies. Investment may also be made in partly convertible issues of debentures and bonds including those issued on rights basis subject to the condition that, as far as possible, the non-convertible portion of the debentures so acquired or subscribed, shall be disinvested within a period of twelve months.
  • It shall be ensured that funds of a plan shall remain invested to the extent of at least eighty per cent in securities specified in clause (a). The scheme shall strive to invest its funds in the manner stated above within a period of six months from the date of closure of the plan in every year. In exceptional circumstances, this requirement may be dispensed with by the Fund, in order that the interests of the assessee are protected.
  • Pending investment of funds of a plan in the required manner, the Fund may invest the funds in short-term money market instruments or other liquid instruments or both. After three years of the date of allotment of the units, the Fund may hold upto twenty per cent of net assets of the plan in short-term money market instruments and other liquid instruments to enable them to redeem investment of those unit holders who would seek to tender the units for repurchase.
The securities mentioned above could be listed, unlisted, privately placed, secured, unsecured, rated or unrated and of any maturity. The securities may be acquired through Initial Public Offerings (IPOs), secondary market operations, private placement or rights offers

Options Available:

  • Growth Plan – Growth option
  • Dividend Plan – Dividend payout Option
Benchmark Index: BSE 100

Minimum Investment Amount:
Minimum initial investment for all categories is Rs.500/- and in multiples of Rs.500/- thereafter. However, as per section 80 C of the Income Tax Act, 1961, the tax benefit will be available only upto a maximum amount of Rs.1,00,000/-.

Specified Redemption Period/Liquidity
The scheme will offer purchase only during the new fund offer period and the redemption/switch-out will be available only during the Specified Redemption Period i.e. first five Business Days on a monthly basis at NAV based prices after an initial lock-in-period of three years from the date of allotment.

Load Structure:
During the New Fund Offer period:
Entry Load: Not Applicable
Exit Load: Nil*
*In accordance with the SEBI (MFs) Regulations, NFO expenses not exceeding 6% of the amount mobilised, will be charged to the scheme and will be amortised over a period of 10 years. If the investor opts for the redemption before the completion of 10 years, proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investor.

Initial Issue Expenses: Under the SEBI Regulations, the Mutual Fund is entitled to charge New Fund Offer Expenses up to a maximum of 6% of initial resources raised under the Scheme. The New Fund Offer expenses for the Scheme would be amortised over a period of 10 years i.e. tenure of the scheme and would be included in the NAV. Any expenditure in excess of this shall be borne by the AMC. If the investor opts for the redemption before the completion of 10 years, proportionate unamortized portion of the NFO expenses outstanding as on the date of the redemption shall be recovered from such investor.

Example: Unitholder’s Investment Rs. 100

Unit face value Rs. 10, Initial Issue Expenses Rs. 6
No of years amortisation of Initial Issue Expense – 10
3650 Nos of days Amortisation of Initial Issue Expenses
NAV Day one Rs. (94+5.9984)/10 = 9.9998

* Recovery of proportionate Initial Issue Expenses
Redemption before expiry of 10 yrs but after 3 yrs of lock in period from the date of allotment will be subject to an early exit charge. An early exit charge equivalent to the unamortized Initial Issue expenses will be recovered from the investor in case of redemption before expiry of 10 yrs but after 3 yrs of lock in period from the date of allotment. This is illustrated below.
Suppose The scheme has mobilised Rs. 100 crore during the NFO period and Rs.6 cores been incurred towards Initial Issue expenses.
Rs. 6 cores will be amortised equally on a daily basis over a period of 10 yrs. If any investor opts for redemption of 10000 units after expiry of 4 yrs (i.e 48 months), unamoritsed balance of Initial Issue expenses will be recovered from the investor by way of an early exit charge. This will be calculated as follows :

NFO Mobilisation Rs. 100 crores
NFO Units Creation 10 crore (100/10)
NFO Expenses Rs. 6 crore
Amortisation Period 120 months
Amortisation Per Day (6,00,00,000/(120*30) = Rs.16,666.67
Amortisation Per Unit Per Day (16,666.67/100000000) =Rs. 0.000167
Units redeemed after 48 months 10000
Unamortised NFO Expenses
At the end of 48 months = 6,00,00,000- (16,666.67*1460)
i.e Rs.3,56,66,661/-
Unamortised Initial Issue Expenses
Per Unit At the end of 48 months = (3,56,66,661 /10,00,00,000)
i.e. 0.3566

Per Unit Early Exit Charge Applicable at the end of 48 months Rs. 0.3566

Assumed NAV at the end of 48 months Rs.13.5000

Amount payable to the investors Rs.13.5 (-) 0.3566 = Rs.13.1434/-

Recurring Expenses:

Type Upto (%)
Investment Management Fees 1.25%
Marketing Expenses 1.00%
Operational Expenses 0.25%
Total 2.50%

Nomination facility: Available

Inter scheme Switch:
Switch – in from other schemes in Reliance Equity Linked Saving Fund – Series I, will be available only during NFO and at the applicable load structure from these schemes, if any.
Switch – out: Available only during the Specified Redemption Period after expiry of lock-in-period of 3 years, at the applicable load structure in the respective schemes.

Inter plan switch: Not available

SIP: Not Available

SWP: Available only during the Specified Redemption Period

STP: Available as a transferor scheme only after expiry of lock-in-period of 3 years

Sponsor: Reliance Capital Limited.
Trustee: Reliance Capital Trustee Co. Limited.
Investment Manager: Reliance Capital Asset Management Limited.
Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956.

Scheme Specific Risk Factors:
Liquidity aspect of investment in the scheme: The amount invested in the scheme shall be subject to a lock-in of 3 years from the date of allotment and thereafter redemption will be available only during the Specified Redemption Period i.e. first five Business Days on a monthly basis at NAV based prices. Eligible investors in Reliance Equity Linked Saving Fund – Series I are entitled to deductions of the amount invested in units of the scheme, subject to a maximum of Rs. 100,000/- under and in terms of Section 80C (2) (xiii) of the Income Tax Act, 1961. The Scheme does not asssure or guarantee any returns. download application forms here Reliance ELSS SERIES 1

DSP MERRILL LYNCH NATURAL RESOURCES FUND

DSP Merrill Lynch Mutual Fund planned to launch DSP Merrill Lynch Natural Resources and New Energy Fund – International and has filed an offer document with market regulator SEBI for the same.

DSP Merrill Lynch Natural Resources and New Energy Fund- International, is an open ended fund of funds scheme, which aims at investing in international funds. The units of the scheme will be available at Rs 10 during the New Fund Offer Period.

The investment objective of the scheme is to seek capital appreciation by investing predominantly in the units of Merrill Lynch International Investment Funds – World Mining Fund (MLIIF – WMF), Merrill Lynch International Investment Funds – World Mining Fund (MLIIF – WEF) and Merrill Lynch International Investment Funds – New Energy Fund (MLIIF – NEF).

The scheme will invest 90% to 100% in the units of MLIIF – WMF, MLIIF – WEF
and MLIIF – NEF or other similar overseas mutual fund scheme and 0% to 100% in Money market securities and/or units of money market/liquid schemes of DSP Merrill Lynch Mutual Fund.

The scheme will offer 2 options to the investors that are growth option and dividend option. The dividend option shall have payout and dividend reinvestment facility.

The scheme will charge an entry load of 2.5% if the amount invested is less than Rs 50 million. There will not be any entry load on the investment, which are more than Rs 50 million. Further the scheme will attract an exit load of 1% if the units are redeemed within six month from the date of allotment. 0.50% of exit load will be charged if the units are redeemed within one year from the date of allotment.

Reliance Natural Resource Fund.

Reliance Mutual Fund (MF) has launched the Reliance Natural Resource Fund, an open – ended equity scheme.
The scheme opens for subscription on Jan. 01, 2008 and closes on Jan. 30, 2008.
The units of the scheme will be available at Rs 10 per unit during the New Fund Offer period.

Objective:
The primary objective of the scheme is to generate capital appreciation & provide long-term growth opportunities by investing in companies principally engaged in the discovery, development, production, or distribution of natural resources and the secondary objective is to generate consistent returns by investing in debt and money market securities.

Options: Growth/Dividend.
The scheme offers growth plan and dividend plan. Growth plan will have the growth option and bonus option. The dividend option will have the payout and dividend reinvestment facility.

The minimum application amount is Rs 5,000 and in multiples of Rs 1.00 thereafter.

The scheme aims at investing 65% to 100% in equity and equity related securities of companies principally engaged in the discovery, development, production, or distribution of natural resources and 0% to 35% in fixed income securities including money market instruments.

Load Structure

If the amount invested is less than Rs 20 million than the scheme will charge an entry load of 2.25% and it will charge 1.25% if the amount invested is less than Rs 50 million. There will not be any entry load if the amount invested is more than Rs 50 million.

The scheme will not charge any exit load.

RELIANCE MF OVERVIEW


Performance and Management

The performance of 65% of the portfolio will be measured against BSE 200 and the balance 35% of the portfolio will be measured against and MSCI World Energy Index.

Reliance Mutual Fund: New Fund Launches

  • Garnering funds not the only objective
  • Thought behind fund launches
  • Potential with a longer term view – key criteria
  • Attempt to provide diversification and uniqueness to an investors portfolio
  • Themes aim to capture maximum return


Flashback: Sector Fund Series (Dynamic Asset Allocation Sector funds)

  • Launched sector funds during 2003-04 when they were not very popular
  • Unique Dynamic Asset Allocation having flexibility to invest 0 -100% in equity and/or 0-100% in debt instruments
  • Four funds launched with a view of 5-7 years
  • Reliance Diversified Power Sector Fund
  • Reliance Media & Entertainment Fund
  • Reliance Banking Fund
  • Reliance Pharma Fund


Macro Economic Scenario: World GDP has been on an upswing
GDP Growth Rates (%)

2001

2004

2007

CAGR
(2000 – 2007)

World

2.5

5.3

4.9

4.3

U.S.

0.8

3.9

2.2

2.5

Euro Area

1.9

2.0

2.3

1.7

India

4.1

7.8

8.4

7.2

China

8.3

10.1

10.0

9.8

Source: IMF

  • Global Economy has been on an upswing since 2001
  • Emerging economies have grown faster than the developed economies


Leading to growing appetite for

  • Infrastructure
  • Consumables
  • Food
  • Power & Energy


This was supported by

  • Capital availability – both debt and equity
  • Low interest rates
  • Higher Income levels
  • Appetite for risk and diversification from investors
  • Money shifting partially to emerging economies

Presenting another Unique Theme & India’s First Natural Resources Fund
“Reliance Natural Resources Fund”


This fund will allow investor to participate in Indian and Global stocks of :

  • Minerals & Commodities
    E.g. Copper, Iron-ore, Zinc
  • Precious Metals
    E.g. Gold, Silver, Diamonds
  • Energy Resources
    E.g. Coal, Oil, Natural Gas, Uranium, Lignite
  • Non-conventional resources
    E.g. Air, Water, Solar
  • Agricultural Products
    E.g. Cotton, Wheat, Corn, Rice
  • Ancillaries to the above
    E.g. Component suppliers, Equipment suppliers
  • Other related companies


Rationale
The rapid economic growth in the emerging economies like India and China has tremendously increased the demand for Natural Resources like Industrial Commodities and Energy. With no new Mega reserves of coal, crude oil, natural gas, metals etc likely to be discovered in the foreseeable future the prices of Natural Resources are likely to remain high and may even go higher.
It is the Fund’s view that India’s growth model promises more stable, sustainable expansion and bigger returns for the investors. There exists a very positive view on the sectors like Agriculture, Manufacturing, Service and Natural Resources which contribute, substantially to our GDP. In our view all these four sectors simultaneously are looking quite attractive and bullish over a longer period.
The Indian Investor like his counterparts in the Emerging Economies is exposed to the economic risks associated with steep and rapid rise in the prices of Natural Resources. There is a need for an Investment Scheme that allows diversified participation to the Indian investors in the Natural Resources Sector.

Why invest in Reliance Natural Resource Fund?

  • From India’s No 1 Mutual Fund with an AUM of Rs 77,764.84 Crs* ( as on 30th Nov 07. Source : http://www.amfiindia.com)
  • An innovative product to compliment current portfolio of funds
  • Huge growth opportunity
  • Valuations attractive compared to potential growth
  • Diversified across resources – not a commodity play
  • Will invest in future growth areas – Agriculture, renewable resources, water, etc
  • Stocks do better than resources themselves

*Source: http://www.amfiindia.com

Outlook

  • Demand would continue to be strong
  • Sustained Infrastructure spending by economies such as India and China would mean tight markets
  • Natural Resources as an ‘asset class’ would only gain more prominence
  • Supply side constraints would remain
    • Inventories to remain at low levels making it difficult to have sustained surplus.
    • Supply would increase but at a lower pace due to significant past under investment
    • Bottlenecks such as lack of skilled manpower would prevent from all out supply glut
  • Prices to remain high
    • Capex costs and operating costs have risen pushing up the long-term prices
    • Higher industry concentration would mean better pricing discipline


    Why Global Diversification now?

    • So far, we felt India was a better investment option offering superior returns, a stand that has been vindicated by strong market performance in India
    • Going forward, merit in looking at opportunities outside India too
    • India does not offer play on many of the resources
    • Some of the global companies are available at attractive valuations
    • Many global companies are now in consolidation phase leading to interesting opportunities as M&A plays.
    • Global companies also offer larger scale plays


    Investment Strategy

    • The Fund invests principally in equity securities of issuers in natural resources industries.
    • The Fund may invest in securities of issuers located anywhere in the world and normally will invest in securities of companies listed on BSE, LSE, NYSE, TSE and ASX.
    • Companies in natural resources industries include companies that RCAM considers to be principally engaged in the discovery, development, production, or distribution of natural resources or are service providers to the Natural Resources Industry; the development of technologies for the production or efficient use of natural resources in addition also furnishing of related supplies or services.

    Natural resources may include, for example, energy sources, precious and other metals, forest products, food and agriculture, and other basic commodities.
    For understanding purpose, companies in natural resources industries may include, for example, companies that:

    • Participate in the discovery and the development of natural resources from new or conventional sources;
    • Own or produce natural resources such as oil, natural gas, precious metals, and other commodities;
    • Engage in the transportation, distribution, or processing of natural resources;
    • contribute new technologies for the production or efficient use of natural resources, such as systems for energy conversion, conservation, and pollution control;
    • Provide related services such as mining, drilling, chemicals, and related parts and equipment


    A particular company will be considered to be principally engaged in natural resources industries if at the time of investment at least 50% of the company’s assets, gross income, cash flow, or net profits is, committed to, or derived from, those industries. A company will also be considered to be principally engaged in natural resources industries if RCAM believes that the company has the potential for capital appreciation primarily as a result of particular products, technology, patents, or other market advantages in natural resources industries.
    Although RCAM may consider the factors described above in purchasing or selling investments for the Fund, it may purchase, sell, or continue to hold an investment for the Fund whenever it believes that doing so may benefit the Fund or on the basis of any of the factors described above or any other factors it may at its discretion consider. (Bombay stock Exchange Limited (BSE), London stock Exchange Limited (LSE), New York Stock Exchange (NYSE), Toronto Stock Exchange (TSE) and Australian Stock Exchange (ASX)).

    Download Form:

    Reliance Natural Resource Fund

    SBI TAX Advantage Fund – Series I.

    Scheme Details:

    SBI TAX Advantage Fund – Series I.

    Scheme opens on 03-DEC-07.

    Scheme closes on 03-MAR-08.

    Fund Type: Close Ended.

    Fund Class: Equity Tax Saving.

    Fund Manager: Rishabh Sheth

    Entry Load: Nil.

    Exit Load: Nil, however, the investor will have to bear the proportionate unamortized initial issue expenses for any redemption /switch out made before the date of maturity.

    Objective: To generate capital appreciation over a period of ten years by investing predominantly in equities of companies across large, mid and small market capitalization, along with income tax benefit.

    Issue Price: (Rs.) 10.

    Minimum Subscription: Rs. 500/- and in multiples of Re. 500/- thereafter

    Plans Available: Growth and Dividend Payout.

    Download Form:

    SBI Tax Advantage Fund Series 1.

    gOLD eTF

    James Grant puts it, “Nothing beats a little cash in a bear market and the oldest form of cash is gold.”

    When markets are erratic and times are unpredictable, the wise thing to do is to step up exposure to an asset that would infuse a semblance of stability and strength in the portfolio.

    The simplest and best way to do this is to invest in a gold exchange traded fund(ETF).

    ETFs are essentially index funds listed on the exchange. You can buy and sell them just like you would buy and sell a share. In a gold ETF, the underlying asset is standard gold bullion (99.5% purity).

    In other words, a gold ETF is just like any other mutual fund scheme – the only difference being, instead of being invested in equity shares, the monies collected are invested in gold.

    Generally, the price of one unit represents approximately one gram of gold. And since these are passively managed funds, the NAV will basically track the price of gold in the open market.

    Currently there are three gold ETFs listed in the market —- Gold BeES, Kotak Gold ETF and UTI Gold ETF. Reliance MF has an ongoing NFO, post which, the units would be listed to begin with on the NSE.

    Now, in a country where gold worth over Rs 70,000 crore per annum is sold in the form of jewellery, coins, biscuits and bars, the total assets under management (AUM) of these schemes amount to just around Rs 325 crore.

    This clearly suggests that investors are either unaware or uncomfortable with buying gold in the electronic form.

    A change of mindset is needed and it shouldn’t really be that difficult, given that we already own other equally valuable assets in a similar form.

    Think of the money in your bank. Whether you have Rs 10,000 or Rs 10 lakh or over a crore, the physical cash is not lying in your safe — your bank passbook indicates the amount you own.

    Similarly, there was a time, not too long ago, when physical share certificates needed to be delivered and stored. Then we shifted to electronic holding and an investor’s life was never more convenient.

    Similarly, gold can also be held in the dematerialised, electronic form, which is a safer and more efficient way of owning it.

    For starters, there is no doubt on the purity — you can’t get purer gold even if you tried and you don’t even have to depend upon human honesty or scruples. With a gold ETF, impurity risk is non-existent.

    Security is, of course, taken care of by the fund, unlike in the case of jewellery or other forms of physical gold, where the threat of theft always looms large.

    Coming to denomination, one can literally buy one gram at a time.

    Though a traditional SIP, as we understand it, is not possible in the case of gold ETFs, one of my friends has been diligently picking up 10 grams of gold per month from mid-March onwards (when the first ETF was made available) and by now, he is already the proud owner of 70 grams of the highest quality gold.

    When it comes to selling back, the making charges of jewellery cannot be recovered. In fact, it is generally bought back at a discounted price. Coins and bars also suffer from similar problems.

    Units of gold ETFs, on the other hand, can be sold by either a call to your broker or with a few clicks of your mouse, if you have an online trading account.

    The tax benefits round off the manifold advantages of holding gold in the electronic form — it is free of wealth tax and subject to long-term capital gains tax of 10% as against 20% in case of physical gold.

    To sum it up Gold prices have spurted by almost 12% in the last two months, leading to a corresponding rise in the NAVs of the gold ETFs.

    However, investors shouldn’t look at gold on the basis of returns in a particular period.

    This investment is essentially a hedge against inflation and its quality of negative correlation with other asset classes like stocks, fixed income securities and commodities during uncertain times.

    Like Karl Marx put it, “Although gold and silver are not by nature money, money is by nature gold and silver.” At the end of the day, bullion is more important than the billion

    ABN AMRO MF Indo-China equity Fund

    ABN AMRO MF to launch Indo-China equity Fund.

    ABN AMRO Asset Management (India) Ltd launched an equity fund on September 3, 07 that would primarily invest in domestic and Chinese markets.

    ABN AMRO Chindia Fund would invest 65-75% of the assets in Indian equities and 25-35% in Chinese equities.

    The fund can also invest up to 10% of the assets in debt, money market instruments and stocks from countries other than India and China, the fund house said. The fund would charge an entry load of 2.5% on investment of less than Rs 50 million and none above that.

    The fund house managed assets worth about Rs 71 billion at the end of July.