How's DSP ML World Gold Fund?

Dhirendra Kumar hosts a weekly TV programme where he answers questions related to mutual funds. We have briefly reproduced the transcript here.

Name of programme: Fund ka Funda
Time of programme: 1.30 pm/Sunday
Channel: Star News

Q. How is DSP ML World Gold Fund?
A. The fund has been launched recently in August 2007 and doing very well. It could be a good diversification beyond domestic equity.

Q. What is fund of funds? Is it a good option to invest? If yes, please suggest a good fund of funds.
Vidula Vyawahare
A Fund of Funds (FoF) is a mutual fund that invests in other mutual funds. It is a basket of mutual fund schemes that can invest in equity and debt schemes. They all are relatively new.

Q. I have invested Rs. 40,000 in SBI Bluechip Fund. Should I redeem on a rally or stay invested?
A. SBI Bluechip was launched last year and has given decent returns in one year. If you are a long term investor, you can shift to better performing, rated funds.

Q. I want to invest Rs. 50,000 in mutual funds. Should I wait for markets to fall? Also, should I do a one time investment or split it over months?
A. You should not time the market and split your investment in 6-12 months in a five or four star rated fund like HDFC Equity, Reliance Vision or Franklin India Prima Plus.

Q. I want to invest Rs. 70,000 each for 3 years in DSP ML T.I.G.E.R Fund and JM CONTRA Fund. Are these worth investing?
Dr. Fahim
A. JM Contra is a very new fund and it is too early evaluate its performance. You can invest in DSP T.I.G.E.R fund with a long term view.

Q. Suggest some good life insurance plans which can give me good returns.
A. Life Insurance Plans do not generate high returns. It's better to invest in mutual funds and take a term plan for life insurance.

Q. What is the future of ICICI Prudential Infrastructure Fund? Should one redeem his investment?
A. ICICI Prudential Infrastructure is not a very old fund, though it has been a consistent performer. It's a sectoral fund and you can exit on a rally if you are not a very long term investor.

Q. I would like to invest in Fidelity Mutual Funds with a long term view. Which is better - Fidelity India Special Situation fund or Fidelity Equity fund?
Haresh B. Chatwani
A. From these two, you can opt for Fidelity Equity Fund. It has done well till now.

Q. It is said that mid-cap funds tend to become unmanageable and hence dangerous when the AUM becomes too large. How do we know how much is too much?
A. Yes. Mid-cap funds struggle to perform beyond a certain size. I guess a size beyond Rs. 2000 crore is an impediment to the performance of a pure mid-cap fund.

(by value research)