IDBI Mutual Fund launches gold fund
Mumbai: Asset management company IDBI Mutual Fund has launched a gold fund of fund scheme targeted mainly at retail investors and people without demat accounts.
The scheme opened for subscription on July 25 and will close on August 8.
The investment objective is to generate returns that corresponds closely to the returns generated by IDBI Gold Exchange Traded Fund (IDBI Gold ETF) that was launched last October.
Under the scheme, investors would not hold gold physically and the AMC would keep the equivalent amount of imported gold in its vault with Bank of Nova Scotia.
"Gold is a great investment asset. We see investment in gold as a component of prudent diversification to hedge against uncertainties, inflation and for long-term benefits," IDBI AMC managing director and chief executive Debasish Mallick told reporters here.
On the amount the AMC expects to garner from the new scheme, Mallick said, "we are expecting at east Rs 100 crore during the NFO period." The fund house further said that investment in gold provides better inflation-adjusted returns.
"In the last 10 years, gold has beaten the headline inflation 8 out of 10 times.
It has outperformed and given positive inflation adjusted returns," he said. The product will be available across most of IDBI Bank's branches, Federal Bank, Indian Overseas Bank and Corporation Bank, he added.