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DSP BlackRock World Agriculture Fund



DSP BlackRock has launched World Agriculture Fund, an open-ended fund-of-fund scheme. The scheme will invest predominantly in the units of BlackRock Global Funds - World Agriculture

Fund, which is an international fund. The NFO closes on October 14. The fund will reopen for regular purchase five days after the date of allotment. BlackRock Global Funds (in which the World Agriculture Fund will invest) invests at least 70% of its total assets in the equity securities of agricultural companies globally. The maximum exposure is towards US assets, says Pankaj Mathpal, a certified financial planner with Optima Money Managers.

SCHEME DETAILS

The scheme offers two options: growth and dividend. The minimum lump-sum application amount is . 5,000 and minimum SIP instalment amount is . 500. There is no entry load, but an exit load of 1% is applicable if units are redeemed within 12 months from the date of allotment. Mehul Jani is the fund manager for this product, who is the dedicated fund manager for DSP BlackRock Mutual Fund for its overseas investments.

TAX TREATMENT

This is a fund-of-fund scheme. Hence, short-term capital gain will be taxed as per individual tax slabs and long-term capital gain will be taxed at 10.3%, or 20.6% with the benefit of cost inflation index.

THE POSITIVE

There is already a widening gap between demand and supply in agriculture. With a sustained increase in population globally, the need for food and agriculture will get increase, which will be profitable for agriculture-based businesses. Hence, investors can expect good returns from such funds.

THE RISK FACTOR

The scheme has international exposure with major exposure in the US. The performance of BG-WAF would be closely linked to the economic, political, and social risks in the US. Also, since it will invest in securities that are denominated in foreign currencies (eg, US dollars), fluctuations in the exchange rates may have an impact on the income and value of the scheme. The fund being a thematic fund can be a top-up to your financial portfolio but not its key ingredient.
 

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