There comes another so-called "Gold Fund" from a new mutual fund house. Everyone is hopping on Gold for their investments so the mutual fund houses are going on launching Gold funds one after the other in the already over-flooded market. Just search for Gold Fund using the search box on this site and you can see how flooded the market currently is.
In this article, we will analyze how good is this Religare Gold Fund NFO, whether this Religare Gold Fund offers anything new or unique for the investors and whether the investors should invest in Religare Gold Fund.
Religare Gold Fund NFO: Review Analysis & Details
Let's begin with some basic details about Religare Gold Fund.What are the NFO dates for Religare Gold Fund?
The NFO period for Religare Gold Fund is from 15 November and will close on 29 November 2011. After the NFO period, the regular buying and redemption of fund units will start. This will be a passively managed fund of funds (What's this?) or better to say fund of a single fund.
What is so unique about this Religare Gold Fund?
Nothing - absolutely nothing is unique in this Godl fund. Like any other Gold fund or Gold saving fund already available in the market, the Religare fund managers will collect money from the investors, and invest that into their own Gold based ETF called Religare Gold ETF or Religare Gold Exchange Traded Fund.
The benefit these kind of investments claim to offer is no requirement for a demat account, exposure to gold in small amounts of investments, easy SIP facility and so on. However, if you are reading this article on a computer, that means you are computer savvy and with a good probability you will have a demat account. Anyways, see the next section on why this Religare Gold Fund is not unique.
What are the other competitor products available in comparison to Religare Gold Fund?
The list is endless. Hardly anything looks different. The recently lauched Axis Gold Fund, then the ICICI Gold Savings Fund, SBI Gold Fund and Reliance Gold Savings Fund (See Review & Details) are the biggest and direct competitor to Religare Gold Fund.
Other than that, there are a lot of Gold based ETF's and Gold based Mutual Funds available:
List of Gold ETF India available for trading on NSE
HDFC has its own ETF: HDFC Gold ETF NFO: Review Analysis & Details apart from others like Quantum Gold Fund (Gold ETF) ICICI Prudential Gold ETF, then SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme and so on.
Other Gold Schemes: Quantum Gold Fund
What are the risks of investing and trading Religare Gold Fund?
The benchmark for Religare Gold Fund is the physical price of gold. Since this is a fund of fund, it will be the Religare Gold ETF which is expected to track the gold prices and then those End of the prices will be reflected in the returns of this Religare Godl Fund. Being an End of the Day pricing product, the fund manager will attempt to give similar returns like the tracking gold price but the tracking error will surely creep in.
Final Thoughts about Religare Gold Fund?
Another Fund of Funds in the Gold investment arena, nothing new compared to what other Gold funds or Gold Saving Funds (already available in the market ) are offering. This fund just adds to the list and gives investors more choice of investment in Gold through a new fund house.
See List of All Mutual Fund and NFO Articles here
During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5000 and in multiples of Re 1 afterwards.
Tax benefit will NOT be available in Religare Gold Fund.
Multiple options available for investments:
Growth Option
Dividend Option - Payout, Reinvestment facilities
Religare Gold Fund Entry Load:
Religare Gold Fund Exit Load: 1% if exit within 1 year ; 2% is exit within 6 months (this is high compared to other gold funds)
NIL beyond 1 year.
SIP or systematic investment plan? Yes. Minimum SIP tenure is 6 months, with minimum SIP amount of Rs. 1000 and in multiples of Re. 1 thereafter.
Physical Gold Prices in India will be the benchmark for tracking the performance of Religare Gold Fund
Mr. Nitish Sikand will be the fund manager for Religare Gold Fund
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