DSP World Gold Fund, a mutual fund that invests in shares of gold-mining companies, has announced plans to diversify into ETFs that also invest in shares of gold miners. The fund’s managers believe this move will provide investors with more options and potentially increase returns.
This fund formerly put its whole corpus into the World Gold Fund of Blackrock Global Funds (BGF). It will now make investments in VanEck Gold Miners ETF, iShares MSCI Global Gold Miners ETF, and VanEck Junior Gold Miners ETF, among others, which give exposure to shares of gold miners in addition to the Blackrock fund.
All of this follows the scheme’s 33.82 percent return for the three months ending January 23.
Reason of Changes
The reason for DSP World Gold Fund diversifying into ETFs that invest in shares of gold miners is likely to provide investors with more options and potentially increase returns. By diversifying into ETFs, the fund can gain exposure to a broader range of gold mining companies. It may be able to capitalize on opportunities in different geographic regions or sectors within the gold mining industry. Additionally, ETFs are generally more liquid than individual stocks, which can benefit investors looking to make quick trades.
In accordance with regulations, the fund house permitted current investors to depart without incurring any fees. However, leaving is not mandatory. The load-free exit window is available from February 1 through March 2, 2023.
However, it is essential to note that diversifying into ETFs will not make the fund less risky. Investing in gold mining companies carries inherent risks, such as fluctuations in gold prices and potential operational challenges at mining sites. Additionally, ETFs also carry their own set of risks, such as the potential for increased volatility and liquidity issues.
It is best for beginners to only use this product if they have a favorable perspective on gold mining or access to professional counsel. Only knowledgeable investors aware of the risks and potential benefits should consider this option.