Merrill Lynch plans $100 MN India Gold fund in June

As per reports, DSP Merrill Lynch Mutual Fund, the Indian arm of the US-based financial services giant, will launch a $100 million (Rs.406 crore) gold-linked fund in June 2007 as it received the necessary regulatory approval from the Securities and Exchange Board of India (SEBI).

The proposed open-ended gold fund would invest in the Merrill Lynch’s World Gold Fund, said DSP Merrill Lynch Mutual Fund senior vice president, S.N. Lahiri.

Lynch’s World Gold Fund was launched in 1994, and had net assets of $5.81 billion as of April 2007. The fund primarily invests in international gold mining companies (82 per cent) and, to a lesser extent, in platinum (10.8 per cent), silver (3.2 per cent) and diamond (1.6 per cent) companies.

On April 24, the Reserve Bank of India, the country’s central bank, raised the ceiling on overseas investments by mutual funds to $4 billion (from $3 billion) as the country’s foreign-exchange reserves crossed the $200 billion-mark for the first time, earlier in the same month.