News: DSP-Merrill Lynch plans to unveil gold fund

(ACERC 17/10/2006) Mumbai - DSP-Merrill Lynch (DSPML) has applied to the Securities and Exchange Board of India for introduction of their Gold Fund in Indian markets. To be launched in November, this will act as a feeder to Merrill Lynch's existing global Gold Fund that invests in gold stocks. Merril Lynch (ML) will raise $100 million (Rs 450 crore) from the Indian market through this open-ended scheme to fund gold-based companies.

The money will be invested in mid-sized companies with market capitalisation of less than Rs 4,500 crore. DSPML will focus on the agrispace, auto ancillaries, media and pharma companies in this segment. There were several new funds and offers from ML that are in the pipeline and awaiting SEBI approvals. The company is focusing on investing in small and mid cap companies as these have the potential to metamorphose into large corporates in the future, depending on their scalability, management and sector growth. While DSPML's asset under management (AUM) has risen from Rs 170 crore in 2002 to Rs 12,300 crore in August of 2006, the company has enjoyed a compounded annual growth rate of 27.2 per cent in its equity fund division since its inception.