Prajna Capital |
- DSP BlackRock World Agriculture Fund
- ICICI Prudential Services Industries Fund
- Concept of Mutual Fund Systematic Investment Plan (SIP)
| DSP BlackRock World Agriculture Fund Posted: 17 Oct 2012 04:29 AM PDT Download Mutual Fund Application Forms Investment Objective
The primary investment objective of the Scheme is "to seek capital appreciation by investing predominantly in units of BlackRock Global Funds-World Agriculture Fund (BGF-WAF). The scheme may, at the discretion of the investment manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. However, there is no assurance that the investment objective of the scheme will be realised. It shall be noted that "similar overseas mutual fund schemes" shall have investment objective, investment strategy and risk profile/consideration similar to those of BGF-WAF.
Is this fund for you?
DSP BlackRock World Agriculture Fund (DB-WAF) is an open ended fund of funds scheme from the stable of DSP BlackRock Mutual Fund. It is a feeder fund which will predominantly invest in units of BlackRock Global Funds-World Agriculture Fund (BGF-WAF), and thus take opportunities emerging within the agriculture theme.
Since DB-WAFs investments will be predominantly in the BGF-WAF (along with units of other similar overseas mutual fund as deemed fit by the investment manager) its performance will be directly linked to the performance of BGF-WAF and other similar such overseas mutual funds; which invests in the equity and equity related securities of agricultural companies across the globe.
Outlook of Global Agriculture Sector
Growing global population requires countries either to accelerate on their agriculture commodities production or import them (if they are deficient in natural resources and technological resources), in order to satisfy the growing demand. However, supply of arable land and other natural resources remains limited and improvement in the farm productivity is imperative. The Governments across nations are looking to reduce the ill effects of using conventional fuels, as global warming have caught the attention of environmentalist and Governments who are now attempting to diversify their fuel supply.
The consumption pattern too, has undergone a change - thanks to growing wealth of emerging nations. Countries such as China and India, which are accelerating on their economic growth rate, have a robust consumption theme, and thus FMCG sector (which for some products is fed by agriculture commodities) has shown resilience despite having faced the brunt of rising cost of living. They have outperformed on this consumption theme due to healthy consumer confidence as compared to developed nations.
Hence, we believe that investors' need to be careful and assess their risk appetite and their preference of geographical diversification before committing to a feeder fund like DB-WAF, because the exposure to developed nations such as the U.S, is dominant in the underlying fund.
Portfolio & Investment Strategy: DSPBR-WAF
DSP BlackRock World Agriculture Fund (DB-WAF) is an offering from DSP BlackRock Mutual Fund which will predominantly invest in units of BGF-WAF (along with units of other similar overseas mutual fund as deemed fit by the investment manager), by allocating it assets in the under-mentioned manner:.
Portfolio & Investment Strategy: BGF-WAF
BGF-WAF seeks to maximise the total returns. The fund invests globally at least 70% of its total assets in the equity securities of agricultural companies. Agricultural companies are those which are engaged in agriculture, agricultural chemicals, equipment and infrastructure, agricultural commodities and food, bio fuels, crop sciences, farm land and forestry.
The Fund invests across market capitalisations and geographies and holds stocks in the range of 40-70. However, the number of stocks held by the fund may actually breach the mentioned range.
The aforementioned table reveals that exposure to the U.S. occupies a dominant portion to the BG-WAF's portfolio, which in turn closely links the performance of DB-WAF to the U.S.'s agriculture sector, in a time when the global economic scenario is experiencing a gloom.
Risk Factors associated with BGF-WAF
Performance of BG-WAF
Being benchmarked against DAX Global Agribusiness Index, BGF-WAF has a track record of a little over 1 ½ year (launched on February 9, 2010), and as on August 31, 2011 the fund has managed asset worth USD 587.8 million. So far the performance table of BGF-WAF reveals that it has been more or less in sync with that of the DAX Global Agribusiness Index; but a noteworthy point is alpha returns haven't been delivered.
Fund Manager Profile
DB-WAF will be managed by Mr. Mehul Jani - the dedicated fund manager for managing overseas investments at DSP BlackRock Mutual Fund. He holds a Masters' degree in Banking and International Finance (from Cass Business School at City University, London) and has to credit a CFA Charter. Mr. Jani has a total experience of 6 years in investment management, and prior to joining DSPBlackRock in October 2008, he was associated with the Morgan Stanley, London.
Fund Outlook
While agriculture theme per se is evergreen, DB-WAF's performance would be closely linked to the performance of its underlying fund – BGF-WAF, as DB-WAF is a fund of funds scheme. BGF-WAF's portfolio reveals a dominance of investing in the U.S which exposes its investors to a country specific risk. Moreover, though the strategy of capitalising on the opportunities available in the global agriculture space appears to be a prudent one; investors would be exposed to several risks including some explained above.
Also from a cost point of view, since DB-WAF is a fund of fund scheme, its investors would have to bear additional cost (in terms of dual management fees and expense ratio. Recurring expenses are estimated to be around 2.5% of average daily net assets. Besides, BGF-WAF charges initial fees as high as 5%. Higher expenses such as these would definitely eat into your returns. ------------------------------------------ Invest Mutual Funds Online
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| ICICI Prudential Services Industries Fund Posted: 17 Oct 2012 03:03 AM PDT Download Mutual Fund Application Forms
Services industries sector covers wide gamut of activities such as trade, banking and finance, infotainment, telecommunication, railways and technical services among others. At present, the service sector constitutes a dominant proportion of our nation's economy. Post liberalisation, companies within the Services sector have so far displayed robust growth which not only led to service industries be a dominant contributor to the economy but has also encouraged many fund houses to offer this theme for investment.
Equity Portfolio
IPSIF is benchmarked to the CNX Service Sector Index. Its latest portfolio (i.e. as on September 30, 2011) constitutes of 32 stocks, where the top-10 stocks account for 52.9% of the portfolio while the top-5 sectors account for 66.9% of its portfolio. The fund manager doesn't churn the portfolio very aggressively as revealed by the portfolio turnover ratio of 0.82 times.
How IPSIF has fared vis-Ã -vis its peers
The table above reveals that IPSIF's performance vis-Ã -vis its peer is quite competitive. On 3-Yr return the fund has fared almost in sync with its benchmark (CNX Service Sector index). However, over 5–Yr time frame it has underperformed its benchmark by a noticeable margin, by clocking returns of mere 4.3% CAGR, as against the 7% CAGR returns generated by CNX Service Sector.
Fund Manager Profile
Even though the returns delivered by ICICI Prudential Services Industries Fund are competing within the category, they are nothing to vie for when seen on a risk adjusted basis. Moreover, since the fund focuses on investing in companies in the "service sector" domain, its fortune would be closely linked to the theme, which makes it a risky investment proposition for one's investment portfolio. ------------------------------------------ Invest Mutual Funds Online
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| Concept of Mutual Fund Systematic Investment Plan (SIP) Posted: 16 Oct 2012 11:30 PM PDT Download Mutual Fund Application Forms
Many investors keep waiting for the markets to come down and a lot of times, markets move in just the opposite direction leaving such investors with no option but to keep their money idle or to invest at even higher levels.
Concept
Just like a Post office Monthly Recurring Deposit Scheme you pay for 5 years monthly certain amount and get back after 5 year your deposit amount and 8% interest on your investment. If your invested monthly 1000 in Post office RD scheme after maturity (5) you get 78 to 79 thousand .
A monthly SIP of Rs 1000 would grow to Rs 21.84 lakh in 15 years
What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) is a disciplined approach to wealth creation. It allows the investor to adopt a systematic and dedicated approach to financial planning by inculcating a regular savings habit.
Instead of investing a large amount at one time, the investor can choose to stagger his investment at regular intervals according to his convenience and ability.
------------------------------------------ Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms
Best Performing Mutual Funds
Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now  |
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