Monday, May 07, 2007 12:10 Hrs IST

DSP ML plans to launch gold fund

Open-ended gold-linked fund next month

DSP Merrill Lynch Mutual Fund will launch an open-ended gold-linked fund next month to raise about $100 million (over Rs 400 crore) to invest in the group's world gold fund programme.

"We have already got approval from market regulator SEBI for the gold fund that will invest in Merrill Lynch's World Gold Fund," DSP Merrill Lynch Mutual Fund senior vice president S N Lahiri said.

The World Gold Fund, launched in 1994 by the United States-based Merrill Lynch, invests predominantly in global conglomerates engaged in mining of gold and other precious metals.

It has a fund size of over $6 billion and the money raised in India will be invested in the global scheme, he said.

RBI recently raised the limit of overseas investments by domestic mutual funds to $4 billion from $3 billion, in a bid to manage over $200 billion of forex reserves.

Lahiri said DSP Merrill Lynch is also planning to launch a Focus 25 fund during this year.

The fund would invest the money in select 25 stocks across different sectors with high growth potential.

DSPML's equity assets under management and non-binding advisory services, including domestic, PMS and offshore advisory mandates, as of March 2007 stood at Rs 16,200 crore.

Global fund house Merrill Lynch owns about 90% in DSP Merrill Lynch, while India's Hemendra Kothari, HMK Investment Pvt and Adiko Investment together have a 10% stake.