Invest in Gold? Invest in Kotak Gold Mutual Fund

After Reliance Mutual Fund, Kotak Mutual Fund has come up with Gold Mutual Fund. It is an open ended fund of funds. And we surely can expect more similar gold related mutual fund (which primarily invests in their respective Gold ETFs) from other fund houses pretty soon. This Kotak Gold Fund just like theReliance Gold Savings Fund invests primarily at the Kotak Gold ETF. 

Kotak Gold Fund NFO

The Kotak Gold Fund is an open ended Fund of Funds scheme (FOF) that is going mostly going to invest in the Kotak Gold ETF. For the liquidity purposes this fund will also invest in short term fixed deposit, money market instruments, etc. The NFO is open from March 4, 2011 and it closes on March 18, 2011. The reopening of this FOF is from April 5, 2011 in which you can buy the units as regular MF units. The benchmark index for this fund is physical gold price. Mr. Abhishek Bisen is the fund manager.

Gold being an excellent hedge against inflation can prove to be an ideal investment and surely has never disappointed in terms of returns for the investors.

Benefits of Kotak Gold Fund

• No need of demat account – Unlike the gold ETFs which compulsorily asks for a demat account to buy and sell, this Kotak Gold Fund does not need Demat account to buy.
• Buy Gold via SIP – Till now there was no option or choice or plan available for us to buy gold via SIP, but with this Kotak Gold Plan one can just give the standing instruction of as little as Rs. 1000 and continue for life long
• Liquidity – Unlike the real gold coins or bars the liquidity of Kotak Gold is very high you can sell the units on any business day and get the cash in your account within a day or two.
• Low Cost – When compared with buying gold as jewellery, coins or bars.

Fund Objective: The key objective of Kotak Gold Fund (KGF) is to generate income by way of investing in gold via the Kotak Gold ETF (KGEFT). The fund will Benchmark the performance of Physical Gold.

Asset Allocation: Up to 95% in gold (in KGEFT) and the balance 5% in money market, short term Fixed Income, CBLO or liquid schemes.

Minimum Investment: For regular purchase the minimum investment amount is Rs. 5000 and in multiples of Re. 1. For SIP purchase the minimum monthly investment is Rs. 1000  The NAV of this fund will be Rs. 10 per unit during the NFO.

Investment Options: Growth and Dividend (reinvestment and payout).

Entry and Exit Load: There is no entry load for this fund but there is a 2% exit load if redeemed or switched within 6 months and 1% if redeemed between 6 months to 1 year. While there is no exit load if redeemed or switched after 1 year of investment.

Expense Rate: This fund carries a double expense rate whereas the maximum total expenses for maintenance of this fund will be 1.50%

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