DSP Merrill Lynch Hopes To Mop Up Rs 75-80Cr In Gujarat

Ahmedabad: DSP Merrill Lynch Fund hopes to raise 10 per cent from the Gujarat market of the target of Rs 800 crore it targets to mop up from the Indian market. They expect to raise Rs 75-80 crore from the Gujarat. The fund hopes to raise Rs 800 crore from the overall market in India. The fund collected will be infused into the parent company's fund Merrill Lynch International Investments Fund - World Gold Fund (MLIF - WGF) and nearly 2-3 percent will be managed by the DSP Merrill Lynch to maintain liquidity for some redemption if required.
DSP Merrill Lynch World Gold Fund is fund to fund scheme, where in the DSP will be investing the money raised through these mutual fund scheme into the fund of its parent company's mutual fund World Gold Fund. The World Gold Fund of the Merrill Lynch is a fund, where in the the money is invested into the stocks of the gold mining companies and not into the gold directly. DSP Merrill Lynch World Gold Fund with offer Indian investors the opportunity to benefit from the likely increase in the gold prices and significantly enhance their return potential as compared to investing in physical gold or gold ETFs. The fund is 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 (MLIF - WGF).

The investor should invest in gold mining companies, as in the last few years gold prices 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 had enhanced the possibility of superior performances and dividends. Thereby investing in a scheme which invests in shares of gold mining companies provides access to the fund manager expertise and active fund management, which is not available in the case of gold ETFs or gold bullion. The price of gold is likely to be supported by robust demand and limited supply of gold.