MF's to Cash in on Commodities

Wednesday, May 14, 2008


SMS Bnews to 57007

Section Home
News
Features
Daily Stockwatch
Market Technicals
Market Trends
Stock Performance
Company Financials
Research & Analysis
Mutual Funds
Personal Finance
Commodities
Money & Forex





Can the Bajaj small car provide tough competition to Tata Nano?
Yes
No





Take Control of your Money
Business Standard Columnists


Comment Print Email this Article

MFs to cash in on commodities
PERSONAL FINANCE
Vandana / Mumbai May 14, 2008, 4:23 IST

With equity markets turning bearish and the commodity cycle at its peak, mutual funds are now shifting their focus to commodities. Fund houses plan to enter this segment through commodity-oriented stocks and mutual funds abroad.

Mirae Asset recently filed its application with the market regulator to set up a global commodity stocks fund that will invest 65 per cent of its corpus in stocks or mutual funds operating in the Asia-Pacific region and emerging markets.

Similarly, Tata Mutual Fund is proposing to launch a gold and precious metals fund that will invest in mining companies. Even ING has filed for a Latin America fund, which will invest in stocks in that region. Since the region is known for its rich natural resources, commodity stocks would be a part of the fund.

NOTE: ING IS VERY KNOWN IN THE STOCKMARKET

Most of the funds are planning to take a feeder-fund structure, whereby the fund will invest in a global fund that has a past track record. Globally, this theme has done quite well.

For instance, Blackrock's World Energy Fund is one such fund that has returned 35 per cent in the last one year (between May 9, 2007, and May 9, 2008). Last year, DSP Merrill Lynch launched the first feeder fund in India, which invests in gold mining companies through its parent company Merrill Lynch World Gold Fund.

Said Dhruva Chatterjee, research analyst, Lipper, "Mutual funds are basically trying to capitalise on rising energy and metal prices. However, investors should remember that the kind of heated-up activity that is going on in commodities, one can never guess when the market will crash."

And the numbers depict this. With crude oil prices shooting up to $126 a barrel and metal prices following the same route, stocks of these companies are enjoying significant attention in international markets.

Financial experts say that such funds can be a good option for an investor looking to invest in overseas markets.

Gaurav Mashruwala, a financial planner, said, "First-time investors should start by investing 2 to 5 per cent of their portfolio in such funds. They can then gradually increase it to 10-15 per cent."

NOTE: MASHRUWALA AND OTHER FINANCIAL PLANNERS SHOULD BE CONSULTED BEFORE INVESTING.

Share Your Comments Print this page Email this Article
NEWS NOW TODAY'S PAPER OPINION MARKETS
FII-TO-FII: Pantaloon traded at 11% premium FII-TO-FII: Pantaloon traded at 11% premium
Sharif files nomination for by-elections Sharif files nomination for by-elections
Five blasts rock Jaipur Five blasts rock Jaipur
Tata Tele to invest Rs 600 cr Tata Tele to invest Rs 600 cr
US gloomy about the way country is heading US gloomy about the way country is heading
Tata Tele gears up for GSM launch Tata Tele gears up for GSM launch
Sebi approves marking lien on bank account Sebi approves marking lien on bank account
CBEC arrear collection exceeds target CBEC arrear collection exceeds target
Tata Steel promises to hold prices Tata Steel promises to hold prices
Hafed to market organic products Hafed to market organic products
Transafe Services' net profit up Transafe Services' net profit up
More
NEWS NOW TODAY'S PAPER OPINION MARKETS
Bharti eyes MTN merger option Bharti eyes MTN merger option
Sebi eases refund mode for new share applications Sebi eases refund mode for new share applications
FM cuts subsidy to oil firms FM cuts subsidy to oil firms
Toyota India deputy MD quits to join Volkswagen Toyota India deputy MD quits to join Volkswagen
Pvt power capacity addition may outshine govt programme Pvt power capacity addition may outshine govt programme
Nissan to roll out budget car by `10 Nissan to roll out budget car by `10
Private players eye seven sick Cement Corporation units Private players eye seven sick Cement Corporation units
Govt may scrap steel export duty Govt may scrap steel export duty
Tata Steel to maintain reduced prices Tata Steel to maintain reduced prices
FII profit-booking leads to Re fall FII profit-booking leads to Re fall
US Ex-Im eyes nuclear power project funding US Ex-Im eyes nuclear power project funding
More
NEWS NOW TODAY'S PAPER OPINION MARKETS
<B>Editorial:</B> The spectre of stagflation Editorial: The spectre of stagflation
<B>Editorial:</B> Effects of warming Editorial: Effects of warming
Arvind Mills: Denim blues Arvind Mills: Denim blues
<B>Akash Prakash:</B> That 70s Show Akash Prakash: That 70s Show
<B>Subir Roy:</B> A new deal with Nepal Subir Roy: A new deal with Nepal
<b>M J Antony:</b> Bitter battles in the sugar fields M J Antony: Bitter battles in the sugar fields
Will the Women`s Reservation Bill help women? Will the Women`s Reservation Bill help women?
<b>Latha Jishnu:</b> Roche`s blockbuster patent and biodiversity Latha Jishnu: Roche`s blockbuster patent and biodiversity
<B>Editorial:</B> Waiting for the results Editorial: Waiting for the results
<B>Editorial:</B> General constitution Editorial: General constitution
Asian Paints: Dull quarter Asian Paints: Dull quarter
More
NEWS NOW TODAY'S PAPER OPINION MARKETS
Sebi eases refund mode for new share applications Sebi eases refund mode for new share applications
Corporate PEs bet big on manufacturing Corporate PEs bet big on manufacturing
MFs to cash in on commodities MFs to cash in on commodities
Future Cap hires ICICI Direct chief Anil Kaul Future Cap hires ICICI Direct chief Anil Kaul
ASE plans financial hub on prime land ASE plans financial hub on prime land
Sensex sheds 108 points as oil stocks plummet Sensex sheds 108 points as oil stocks plummet
Stocks follow fashion trends, cash flow in-thing for now Stocks follow fashion trends, cash flow in-thing for now
Gujarat cotton farmers to set up cooperative Gujarat cotton farmers to set up cooperative
PE investments to hit $16 million this year PE investments to hit $16 million this year
Declining daily range indicates weak bias Declining daily range indicates weak bias
Nifty seems to be headed lower Nifty seems to be headed lower
More
Add To Favorites Default Page Top
BS Primer
Understanding the basics
Indian Premier League
The business of cricket
Inflation
Centre's woes mount
More Specials

The Smart Investor
Bargain stocks
The Strategist
Community service
The Weekend
On the busy road to Chakan

Advanced Search
Sensex 16753 (-108)
Nifty 4958 (-55)
Rs-$ 42.1
Gold (Rs) 11827 (-134)
Silver (Rs) 23063 (-404)
Updated:13-05-08 21:02 hrs IST
Most Popular

Read

Emailed

Commented
HP to buy EDS for $13.9 billion
Sena wants `Bombay` out of BSE
FM cuts subsidy to oil firms
Bharti eyes MTN merger option
Toyota India deputy MD quits to join Volkswagen
More

Read

Emailed

Commented
Toyota India deputy MD quits to join Volkswagen
LN Mittal to buy 3.9% in Indiabulls Singapore
Singapore: An emerging destination for Indian students
Goa to seek minister`s help for Mopa airport
Maharashtra govt dithers on ULC repeal
More

Read

Emailed

Commented
More

StatsGuru
Economic indicators

Your Money
Personal finance

Time Out
Books,fashion...

SEZs
Boon or Bane?

Retail
The Indian Story
More

Main Section
BS Online | Companies & Industry | Banking & Finance |
Economy & Policy | Opinion & Analysis | Life & Leisure | SME

ABOUT US PARTNER WITH US CODE OF CONDUCT JOBS@BS ADVERTISE WITH US TERMS & CONDITIONS SITE MAP CONTACT US
Business Standard Ltd. Copyright & Disclaimer
feedback@business-standard.com | Designed and Developed by E Dot Solutions I Pvt Ltd
Site best viewed in IE4 & above with a screen resolution of 800 x 600 pixels