Sunday, January 11, 2009

DSPML World Gold Fund or AIG World Gold Fund

As you know from my previous messages, DSPML has been a favourite of mine since its launch. And it has repaid my faith by being an outperformer.
The same goes for AIG World Gold Fund also. It too has been my
favourite.
Both the funds act as Feeder Funds and invest in funds run by their parent Funds. Both invest in Gold Mining companies worldwide and have more or less similar portfolios.
But there is a difference between the two.
Yes, there is.
Even though both invest in Gold Mining companies and have similar portfolios and have given similar returns in the past, there are two BIG difference between the two.
1. DSPML World Gold Fund tends to invest in Large Caps and Blue Chips and therefore less volatile.
Whereas AIG world Gold Fund prefers Mid caps and is thus more volatile
2. DSPML World Gold Fund has more 60% exposure to South African Mines and very little exposure to Canadian Companies
Whereas AIG World Gold Fund has a bias towards Canadian companies.
The point to be noted here is, that Gold Experts are unanimous in their opinion that the mines in South Africa are saturated and over a period of two-five years, may lose their dominance due to high cost of production.
This point makes it clear that for a LONG term investor, AIG World Gold Fund may give better returns than DSPML World Gold Fund.
I hope this will make your decision easier.
BEst of luck.

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