DSP Merrill Lynch Fund Managers Ltd. launches DSP ML World Gold Fund

DSP ML launches DSP ML World Gold Fund

DSP Merrill Lynch Fund Managers Ltd. announces the launch of DSP Merrill Lynch World Gold Fund, 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 (MLIIF – WGF). This scheme is open-ended, and not an Exchange Traded Fund. The New Fund Offer (NFO) will commence on July 25, 2007 and close on August 23, 2007.

Merrill Lynch International Investments Fund – World Gold Fund (MLIIF – WGF). MLIIF – WGF is an open ended scheme. Launched in 1994, it currently manages assets of over US$ 5.4 billion (over Rs. 21,000 crore)*. The scheme is rated AAA by both S&P Fund Research* and Forsyth Partners*. Over its 12 year track record, the scheme has outperformed its benchmark – FTSE Gold mines (cap) Index over the last one, three and five years and since inception*.

This scheme is managed by Mr. Graham Birch, PhD – Managing Director, Portfolio Manager and Head of Natural Resources team, and Mr. Evy Hambro – Managing Director and Portfolio Manager. The Natural Resources team currently manages assets in excess of US$ 34 billion (over Rs. 1,38,550 crore)* and has a collective experience of over 75 years in fund management.

Why should one invest in the shares of Gold mining companies? – In the last few years gold prices have 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 enhances the possibility of superior performance and dividends.

Shares of Gold mining companies v/s Gold ETFs / Bullion? – Investing in a scheme which invests in shares of gold mining companies provides access to fund manager expertise and active fund management, which is not available in the case of gold ETFs or gold bullion. Also investing in gold mining companies offers investors the upside opportunity through organic / M&A growth and leverage on the increasing price of gold.

Why invest in DSP Merrill Lynch World Gold Fund? – This is a unique investment opportunity where investors get access to MLIIF–WGF, one of the largest funds in its category^ with a 12 year performance track record, thereby allowing one’s investments to benefit from international diversification.

The price of gold is likely to be supported by robust demand & limited supply. The robustness in demand is fuelled by the strong jewellery demand out of Asia and the Middle East. Central banks are also looking to diversify their investments by increasing their gold holdings. Investing in DSP Merrill Lynch World Gold Fund will give the investor the dual benefit of the growth potential of equities as well as the strong fundamentals of gold.

Speaking on the occasion of the launch, Mr. S. Naganath, President and Chief Investment Officer of DSP Merrill Lynch Fund Managers, said, “Gold bullion has traditionally been a favoured savings instrument for the Indian household. DSP Merrill Lynch World Gold Fund will offer Indian investors the opportunity to benefit from the likely increase in gold prices and significantly enhance their return potential as compared to investing in physical gold or gold ETFs.”