Three mutual fund companies, Taurus, Deutsche and Quantum have filed draft offer documents with the Securities & Exchange Board of India (Sebi) for three gold-related funds – all within one week.

With investors around the world giving gold its due, the demand for the precious metal along with a weakening dollar brightens the long-term prospects of gold. Both asset managers and retail investors in India are increasingly becoming aware of the need to allocate funds to gold as an asset class.

Deutsche Mutual Fund has filed an offer document with Sebi for the launch of its DWS Gold Advantage Fund, an open-ended debt fund. It expects to generate income by investing in fixed-income securities and capital growth scheme in gold-related securities. The fund may invest up to 100 per cent in money market instruments and cash, while it will invest up to 35 per cent in gold ETFs.

Quantum Mutual Fund has filed an offer document with Sebi for the launch of Quantum Gold Savings Fund, an open-ended fund of fund (FoF). As of now, there are no gold FoFs, but three of them, Benchmark, Reliance and UTI, apart from Quantum, have filed offer documents with the market regulator, according to ValueResearch.

Quantum's fund will invest up to 100 per cent in units of Quantum Gold Fund ETF, while it will invest up to 10 per cent in money market instruments, short-term corporate debt securities and units of debt and liquid schemes of mutual funds.

The only other fund which is like Quantum Gold Advantage Fund is Benchmark Gold FoF which also has filed an offer document. The Benchmark Gold FoF will invest in its Gold Benchmark ETF.

Experts said that with gold having proved its mettle as an asset protector, investor acceptance could be higher for the new fund offers. Srikanth Meenakshi, director of fundsindia.com, said, “For the two-year period ending March 12, gold ETFs have been among the top three fund categories with net asset values having gained an average 13 per cent a year.”

On March 12, Taurus Mutual Fund filed an offer document for the launch of its Taurus Gold Edged Monthly Income Plan (MIP). This is an open-ended income fund. The fund would invest up to 95 per cent in debt and money market instruments, up to 25 per cent in equity and equity related instruments and up to 25 per cent in gold ETFs. The minimum investment amount will be Rs 5,000 (growth option) and Rs 25,000 (dividend option).

Rakesh Jha of Moneytime Advisors said there were over 15 monthly income plans (MIPs) with a 12-month track record. “These have generated between 15 and 40 per cent gains. With both equity and debt markets hip hopping around in a most volatile manner, MIPs could well be the answer to most investors’ problem. And if there is a bit of gold, that could add more comfort to the MIP portfolio.”