DSP Merrill Lynch Fund Managers Ltd. launches DSP Merrill Lynch World Gold Fund – A unique international investment opportunity so far not available to Indian Investors
Mumbai, July 19, 2007: DSP Merrill Lynch Fund Managers Ltd. announces the launch of DSP Merrill Lynch World Gold Fund, an open ended fund of funds scheme investing in gold mining companies through an international fund, with a primary investment objective of seeking capital appreciation by investing predominantly in the units of Merrill Lynch International Investments Fund – World Gold Fund (MLIIF – WGF). This scheme is open-ended, and not an Exchange Traded Fund. The New Fund Offer (NFO) will commence on July 25, 2007 and close on August 23, 2007.
Merrill Lynch International Investments Fund – World Gold Fund (MLIIF – WGF). MLIIF – WGF is an open ended scheme. Launched in 1994, it currently manages assets of over US$ 5.4 billion (over Rs. 21,000 crore)*. The scheme is rated AAA by both S&P Fund Research* and Forsyth Partners*. Over its 12 year track record, the scheme has outperformed its benchmark – FTSE Gold mines (cap) Index over the last one, three and five years and since inception*.
This scheme is managed by Mr. Graham Birch, PhD – Managing Director, Portfolio Manager and Head of Natural Resources team, and Mr. Evy Hambro – Managing Director and Portfolio Manager. The Natural Resources team currently manages assets in excess of US$ 34 billion (over Rs. 1,38,550 crore)* and has a collective experience of over 75 years in fund management.
Why should one invest in the shares of Gold mining companies? - In the last few years gold prices have witnessed a steady rise due to the increasing demand – supply gap. Profitability of gold mining companies tends to increase with a rise in the price of gold. This enhances the possibility of superior performance and dividends.
Shares of Gold mining companies v/s Gold ETFs / Bullion? - Investing in a scheme which invests in shares of gold mining companies provides access to fund manager expertise and active fund management, which is not available in the case of gold ETFs or gold bullion. Also investing in gold mining companies offers investors the upside opportunity through organic / M&A growth and leverage on the increasing price of gold.
Why invest in DSP Merrill Lynch World Gold Fund? – This is a unique investment opportunity where investors get access to MLIIF–WGF, one of the largest funds in its category^ with a 12 year performance track record, thereby allowing one's investments to benefit from international diversification
The price of gold is likely to be supported by robust demand & limited supply. The robustness in demand is fuelled by the strong jewellery demand out of Asia and the Middle East. Central banks are also looking to diversify their investments by increasing their gold holdings. Investing in DSP Merrill Lynch World Gold Fund will give the investor the dual benefit of the growth potential of equities as well as the strong fundamentals of gold.
Speaking on the occasion of the launch, Mr. S. Naganath, President and Chief Investment Officer of DSP Merrill Lynch Fund Managers, said, "Gold bullion has traditionally been a favoured savings instrument for the Indian household. DSP Merrill Lynch World Gold Fund will offer Indian investors the opportunity to benefit from the likely increase in gold prices and significantly enhance their return potential as compared to investing in physical gold or gold ETFs."
*Source : Merrill Lynch Factsheet, data as on June 29, 2007. As per conversion rate on June 29, 2007: USD/INR = 40.75. ˆFunds investing in gold mining companies
Investment Objective: DSP Merrill Lynch World Gold Fund (the Scheme) is an open ended fund of funds scheme, investing in gold mining companies through an international fund, and the primary investment objective is to seek capital appreciation by investing predominantly in units of Merrill Lynch International Investment Funds - World Gold Fund (MLIIF – WGF). The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. Asset Allocation: 1. Units of MLIIF – WGF or other similar overseas mutual fund scheme(s): 90% to 100% 2. Money market securities and/or units of money market/liquid schemes of DSP Merrill Lynch Mutual Fund: 0% to 10%. Terms of Issue: Rs. 10/- per Unit plus Entry Load (During NFO). Min Investment – Rs. 5,000/-. Load Structure & Expenses: Entry Load – 2.25% (for regular investments < Rs. 5 crore during NFO and Continuous Offer), NIL (for regular investments ≥ Rs. 5 crore during NFO and Continuous Offer), 1% (for SIP investments during Continuous Offer). Exit Load - 0.50% (for holding period < 6 months), 1.25% (for SIP investments, holding period < 2 yrs). Investors shall bear the recurring expenses of the Scheme in addition to the expenses of the underlying scheme(s) in which the Scheme will make investment. Investor Benefits & General Services: During Continuous Offer, sale (at Purchase Price) and redemption (at Redemption Price) on all Business Days (Redemption normally within 5 Business Days). SIP, SWP, STP (During Continuous Offer) & Nomination facilities available (If the SEBI limits for overseas investments are expected to be exceeded, the NFO may be closed / subscriptions, switches into the Scheme (During Continuous Offer) may be temporarily suspended / SIP/STP into the Scheme may be terminated). Declaration of NAV for each Business Day by 10 a.m. of the next Business Day. Statutory Details: DSP Merrill Lynch Mutual Fund was set up as a Trust by the settlors, DSP Merrill Lynch Ltd. (DSPML) and Merrill Lynch Investment Managers LP, USA. Sponsors: DSPML, DSP HMK Holdings Pvt. Ltd. and DSP ADIKO Holdings Pvt. Ltd. (collectively) (Liability restricted to Rs. 1 lakh). Trustee: DSP Merrill Lynch Trustee Company Pvt. Ltd. Investment Manager: DSP Merrill Lynch Fund Managers Ltd. Risk Factors: Mutual funds, like securities investments, are subject to market and other risks and there can be no assurance that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of Units issued under the Scheme can go up or down depending on the factors and forces affecting capital markets. Past performance of the sponsor/AMC/mutual fund does not indicate the future performance of the Scheme. Investors in the Scheme are not being offered a guaranteed or assured rate of return or dividend. DSP Merrill Lynch World Gold Fund is the name of the Scheme and does not in any manner indicate the quality of the Scheme, its future prospects or returns. The Scheme is required to have (i) minimum 20 investors and (ii) no single investor holding>25% of corpus. If the aforesaid point (i) is not fulfilled within the prescribed time, the Scheme will be wound up and in case of breach of the aforesaid point (ii) at the end of the prescribed period, the investor’s holding in excess of 25% of the corpus will be redeemed as per SEBI guidelines. For scheme specific risks, including risks related to investments in MLIIF – WGF and other similar overseas mutual fund(s), please refer the Offer Document. Please read the Offer Document and KIM (available at http://www.dspmlmutualfund.com) carefully before investing.