Mutual funds all set to launch gold and real estate funds

Mumbai: The mutual funds industry is all set to launch gold exchange traded funds and real estate funds as it opens its portfolio for a larger number of investors, the Association of Mutual Fund Industry (Amfi) chairman A P Kurian said in Kolkata yesterday.

Gold funds and real estate funds are expected to relieve the mutual funds industry of its current equity-linked uncertainties and bring more value through investments in fixed assets assuring return of capital.

Speaking on the sidelines of a meeting with the Merchants Chamber of Commerce, he said the funds meant to attract investors in different asset classes would be launched shortly.

The UTI Mutual Fund and Benchmark MF, Kurian said, had already applied with the Securities and Exchange Board of India for gold funds while the real-estate funds would also hit shortly.

"Valuation of the gold funds would be done based on the London Metal Exchange price, import duty and exchange rate," he said.

Meanwhile, Kurian said, the stock market volatility saw a net erosion of Rs4,600 crore in mutual funds in June. "For the month of June assets under management (AUM) of the MF industry was Rs2,65,534 crore. There was a net outflow of Rs4,500 crore (adjusted) from the industry due to panic redemption," Kurian said.

This, he said, is a temporary blip and the industry would bounce back in the long run.

The MF industry posted a 55-per cent growth in assets under management (AUM) in 2005-06 at Rs231,862 crore over the previous year. Kurian, however, said the real growth of fresh funds was marginal if adjusted with rise in market capitalisation of the money that was already invested.