Rs 800 cr fund for Indian investors launched

New Delhi, July 29: DSP Merrill Lynch Fund Managers Ltd has launched a new scheme for Indian investors, which will invest indirectly in shares of gold-mining companies of North America, South Africa and Australia.

The scheme called World Gold Fund aims at raising Rs 800 crore from the Indian market.

''We will raise about Rs 800 crore through the scheme, and after getting approval from Securities and Exchange Board of India (SEBI), we can further raise investments through this scheme,'' DSP Merril Lynch Fund Managers Executive Vice president (Head-Equities and Corporate Strategy) Anup Maheshwari said.

The primary investment objective of the open-ended scheme is to seek capital appreciation by investing predominantly in the units of Merrill Lynch International Investments Fund-World Gold Fund.

The New Fund Offer (NFO) commences from July 25, 2007 and close on August 23, 2007.

''In the last few years, gold prices have witnessed a steady rise due to the increasing demand and 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, he said.

The price of gold is likely to be supported by robust demand and limited supply. The strong demand is fuelled by an increased demand jewellery, out of Asia and West Asia. Central banks are also looking to diversify their investments by increasing their gold holdings.

''The northern region is an important market for the company and we hope to attract 25-30 per cent of the total investment under this fund,'' added Mr Maheshwari.

Merrill Lynch International Investments Fund World Gold Fund (MLIIF WGF) was launched in 1994 and currently manages assets of over Rs 21,000 crore.

UNI