Skip to main content

DSP Blackrock World Agriculture Fund

DSP BlackRock's new fund offer (NFO), the World Agriculture Fund, is a fund of funds (FoF) scheme. The scheme will invest in the BlackRock Global Fund-World Agriculture Fund (BGF-WAF), that invests in equities of agricultural companies globally.

The BGF-WAF is benchmarked against Luxembourg's DAX Global Agribusiness Index. The scheme has performed in line with the benchmark in the past year (as on August 31) with returns of 20.5 per cent, whereas its benchmark has gone up 21 per cent. In the past six months, the fund's returns have fallen 7.5 per cent and its benchmark was down 6.6 per cent.

SNaganath, president and chief investment officer of DSP BlackRock, said, "Agriculture is a sector represented globally, which has sound fundamentals over the long term, given the rising imbalance between food demand and supply. We believe agriculture is an investment opportunity, with the potential for growth in the long-term." There are two more international feeder funds in India that invest in shares of agri-commodities companies abroad. Deutsche Asset Management, the mutual fund arm of Deutsche Bank, had a fund —DWS Global Agribusiness Offshore —launched in April 2010. This returned 2.49 per cent in the past year. Birla Sun Life Asset Management Companys Global Agri Fund has returned a negative 9.34 per cent. In comparison with equities, it has done better in recent times. The Sensex in the past year dipped 19 per cent.

The charges for international feeder funds are no different from what domestic fund investors would pay. The overall asset management charges are capped at 2.25 per cent. The fund invests in agricultural science companies, fertilisers, agricultural equipment, agribusiness, food processors, land & farming, forestry and allied sectors.

For investors wanting to take advantage of the agri-commodities story, this fund is a good opportunity. The international trend of investing in scrips such as Monsanto, Potash Corp, Deere, ArcherDaniels-Midland, Wilmar International etc. is an added attraction.

The move seems timely, as analysts feel prospects for the agriculture sector look bright. The agri-commodities space looks promising, as prices are likely to rise.

The disadvantage of investing in a global feeder fund is that it is treated as a debt fund and you have to pay capital gains tax. The shortterm capital gains tax (less than 12 months) is 30 per cent. The longterm capital gains tax (more than 12 months) is lower, at 10 per cent without indexation or 20 per cent post it.

A fund such as this is meant for those with a large portfolio and a capacity to bear risks and the volatility associated.

The exposure to thematic funds should be 5-10 per cent. And, to invest in these requires a more active management by the investor.

Besides the usual risk of investing in equities, there is a foreign exchange risk as well on investing in an international feeder fund.
 

Popular posts from this blog

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Read more

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...
Read more

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...
Read more

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now