The only thing to remember before investing in these funds, is the risk profile of the Fund. The return offered by these funds are more. So the risk profile of these funds will also be more. These funds are suitable for those who can absorb risks. When compared with other investments in Gold like Gold ETFs or e-Gold, the fluctuation in the unit price is more. So only those investor who can tolerate risks should invest in these scheme. World Gold Fund run by both companies more or less invest in Global or overseas mutual funds which invest in Gold and Gold mining companies and physical Gold and other debt instruments. Since these funds invest in mining companies which are listed in stock markets overseas, the risk profile will be more. Normally when the price of Gold booms, the chances of returns getting better than the returns offered by Gold ETFs or e-Gold in India. Now let us compare and analyse the two Gold funds or Gold fund of funds in detail.

AIG World Gold Fund

AIG Gold fund is a Gold fund of funds. It is another way of investing Gold in India. It is run in India by the AIG Investments. This fund invest in international securities or stock which are in the productions of Gold, processing of Gold, marketing of Gold. AIG World Gold Fund invest in Gold related products through an international fund- Falcon Gold equity fund. This fund mainly invest in the units of Falcon Gold Equity Fund. When the units of Falcon Gold equity fund appreciates in value, the NAV of the AIG World Gold Fund also appreciates.

AIG World Gold Fund keeps investment ratio of 80-100% in Falcon Gold equity fund and other related mutual funds and the rest of 0-20% in debt instruments.

1)   Bench mark

Financial Times Gold mines Total price index in USD is the bench mark of Falcon Gold equity fund.

2)   Options available for investors in India.

The scheme offers Growth and Dividend option for the investors in India to invest in AIG Gold Fund

3)   Minimum investment and minimum redemption

For SIP and STP, the minimum amount of investment and minimum amount of redemption is Rs.1000.

4)   Entry and Exit load for investors in India

There is no Entry load for buying units of AIG WORLD GOLD FUND. 1% exit load will be charged, if the units are redeemed within the first one year of purchase.

5)   Expense ratio

As on March 31, 2011 the expense ratio of the fund is 1.5%.

6)   Launching date

This fund was launched in India on May 2008.

7)   Asset size

Asset size of AIG World Gold Fund as on June 31, 2011 is 206.10crores.

8)   Returns

1 year return = 33.20%

2 year return = 27.90%

3year return = 20.20%

(Annualized one year returns are made here)

9)   NAV

NAV as on 01/07/2008 = 10.529

NAV as on 26/07/2011 = 15.927

10) Charges

As already said, expense ratio of 1.5% is maintained by AIG WORLD GOLD FUND. Apart from this, you have to bear transaction charges, brokerages, etc....

DSP BlackRock World Gold Fund

DSP Black rock fund also invest in Gold and Gold related instruments. DSP Black rock fund is a World Gold fund which invest predominantly in Black Rock Global Funds - Global Gold Funds. It also invest in other mutual funds which invest in Gold related companies in the overseas markets. Like AIG World Gold Fund, it also invest a part of their portfolio in debt and money market instruments.

90-100% of the portfolio will be invested in Black Rock Global Funds - Global Gold Funds and related mutual funds overseas. Rest of the portfolio will be invested in debt and money market instruments.

DSP Black Rock World Gold Fund

Comparison of Gold Fund of Funds in India