ICICI Gold Savings Fund NFO: Review Analysis & Details

Details about ICICI Prudential Regular Gold Savings Fund: Review, Analysis, Details & Investment Opinion. Gold, Silver, Precious metals are appearing to be the most sought after commodities. With the high volatility in the USD exchagne rates as well as that in the crude oil prices, the investors, traders as well as the big institutions like the central banks of the world are running for gold to be in their reserves. Right from common man to big central banks, everyone has been dancing to the tunes of Gold investments, and so the prices have gold have shot up the roof in last 5 years. However, one must not forget what happened in last 2 days. Gold prices have tanked down with the biggest intra day fall again raising the speculation that is going on in gold and silver.
India, being one of the biggest consumers of gold, has a big festive season ahead and asset management companies are trying to attract the investors to get into gold products with an assurance that gold prices have given good returns in the past so investors must invest in gold products. Already, there were lot of gold products in the market, the most recent one was SBI Gold Fund and now ICICI Prudential MF AMC has come out with so called

ICICI Prudential Regular Gold Savings Fund. I still have objection to the use of word "Savings" because there is no guarantee of positive returns, but that's something the investors should note and be careful about.
The ICICI Mutual Fund House is launching their ICICI Gold Savings Fund. In this article, we will analyze how good is this ICICI Gold Savings Fund NFO, whether this ICICI Gold Savings Fund offers anything new or unique for the investors and whether the investors should invest in

ICICI Gold Savings Fund.

ICICI Prudential Regular Gold Savings Fund NFO: Review Analysis & Details

Let's begin with some basic details about ICICI Gold Savings Fund.

What are the NFO dates for ICICI Prudential Regular Gold Savings Fund? The NFO period for ICICI Gold Savings Fund is currently open and will close on 4 October 2011. After the NFO period, the regular buying and redemption of fund units will start, but the precise date is not known.

What is so unique about this ICICI Gold Savings Fund? Investors and traders would know that there is a Gold ETF already available in the market from ICICI MF, it is

ICICI Prudential Gold Exchange Traded Fund (IPru Gold ETF). What this

ICICI Gold Savings Fund will do is collect money from investors (either one time or multiple times through SIP or Systematic Investment Plan) and invest that money in ICICI Prudential Gold Exchange Traded Fund - the Gold ETF from ICICI MF.
So, this new Gold Fund from ICICI will work exactly the way the Reliance Gold Savings Fund (See Review & Details), SBI Gold Fund and Kotak Gold Savings Fund works. They too pool in money from investors, and invest in their own respective Gold ETF's.
In my honest opinion, I dont see any special benefits of such Gold Funds or Gold Savings Funds - (SBI has been good atleast not to use the word SAVINGS in their product, which I was not happy about with Reliance, Kotak and now with ICICI). My take is that it is much easier for investors to directly invest in Gold ETF's rather than going through the Fund route.
However, there are a few advantages of these so called Gold (Savings) Fund. They allow you to invest in small amounts. You dont need to worry about the intra-day high low prices of Gold ETF or similar products with intra day trading. One does not need to have demat account which is mandatory in case of Gold ETF.
At the same time, the above advantages come with disadvantages - you cannot benefit from intra-day price movements (but is that required? you are inevsting in this gold fund for long term saving purpose), you pay fund management charges (you pay brokerage to broker for Gold ETF trading) and son on.
Although the investment objective of the ICICI Gold Savings Fund is to generate returns similar to ICICI Gold ETF, I wonder what actually this fund is going to really do instead of just being a channel to route investor's money into their own Gold ETF.

What are the other competitor products available in comparison to ICICI Gold Savings Fund? The recently lauched SBI Gold Fund and Reliance Gold Savings Fund (See Review & Details) are the biggest and direct competitor to ICICI Gold Savings Fund - the two products from Kotak and Reliance Fund houses work in almost the same way.
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 Recently, HDFC came out with HDFC Gold ETF NFO: Review Analysis & Details
Then there is the good old Quantum Gold Fund (Gold ETF)
and ICICI Prudential Gold ETF, then SBI GETS-SBI Gold ETF NFO Review: SBI Gold Exchange Traded Scheme
Other Gold Schemes: Quantum Gold Fund
Want to know how Gold prices have performed historically, see Gold ETF: Historical Performace of Gold ETF


What are the risks of investing and trading ICICI Gold Savings Fund? The benchmark for this Gold Savings Fund from ICICI is the domestic prices of gold. By investing in such a fund, you are taking the risk on overall Gold price movements. If the Gold prices start going down after you invest in this fund, so will the price of ICICI Gold ETF and hence this ICICI Gold Savings Fund investments values will also go down.

Final Thoughts about ICICI Gold Savings Fund? Nothing special, just another gold based fund adding to the long list of Gold based funds already available in the Indian markets. If you are reading this article, that means you are aware about the computer and demat and things like that (no paper based application), so my advise will be to directly invest in ICICI Gold ETF (or any other Gold ETF) instead of this fund. Let the ICICI Gold Savings Fund be for those who dont want to get into the hassles of demat and such things or for those who are really looking for very small SIP investments like Rs. 100 and so on.
See List of All Mutual Fund and NFO Articles here During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5,000 and in multiples of Re 1 afterwards.
No tax benefit will be available in ICICI Gold Savings Fund
Mr. Chaitanya Pande will be the fund manager for ICICI Gold Savings Fund.
Multiple options available for investments in ICICI Gold Savings Fund :
Growth Option
Dividend Option - Payout, Reinvestment facilities
ICICI Gold Savings Fund Entry Load: Nil
ICICI Gold Savings Fund Exit Load: 2% if exit within 1 year - this is much higher compared to what SBI Godl Fund and Reliance Gold Savings Fund is charging (they have it at 1%)
NIL beyond 1 year.
SIP or systematic investment plan? Yes with minimum 1000 Rs. - That's again much higher minimum SIP amount requried. Reliance and SBI are offering minimum SIP at 100 Rs.

Domestic Price of physical gold will be the benchmark for tracking the performance of ICICI Gold Savings Fund