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Money Today-Plexus Management evaluate Birla Sun Life Commodities Equity Fund: go through all the investment options and put your money in the one that you understand the best.

Print Edition: October 16, 2008

Birla Sun Life Commodities Equity Fund

Fund facts

Offer open: Till 14 October

Scheme type: Open-ended global commodity-based equity fund that will invest in three areas: agri-products, precious metals and multi-commodities.

Minimum investment: Rs 5,000; unit price: Rs 10

Loads: Entry load: 2.25%; Exit load: 1% (within 1 year)

Options: Growth and dividend (payout and reinvestment)

Investor grievances: Birla Sun Life Asset Management Company; Tel: (022) 66928000; Fax: (022) 66928111; E-mail: connect@birlasunlife.com

Fund stats

Objective: To offer long-term capital growth by investing in stocks of commodity companies and/or overseas mutual fund schemes that have similar investment objectives. The securities could be issued in India or overseas.

Benchmark: Dow Jones Precious Metal Index / S&P Global Agribusiness Index / MSCI World Index (according to the chosen fund investment option).

Fund managers: Ankit Sancheti and Vineet Maloo

Asset allocation:
• Overseas equities: 65-100%
• Indian securities: 0-35%
• Overseas equity mutual funds: 0-35%
• Debt, money market instruments: 0-20%

Fund prognosis

Idea distiller: Increasing world population and improving lifestyles in the rapidly growing BRIC nations will lead to a higher demand for commodities. It’s the demand and supply which govern the returns. Being cyclical in nature, commodity prices follow business cycles.

Fund house report: Birla Sun Life is a Rs 38,184 crore fund house with funds across various investment classes. This is their fourth overseas fund.

AUM as on 31 August

Fund manager’s report: Performance of fund managers
• Returns profile: 4/5
• Risk profile: 3/5

Scheme DNA: Four fundamentals of the fund scheme
• Unique idea: High
• Return possibility: Medium
• Risk: Medium
• Operability/complexity: High

Investor takeaways

Who should apply: Those who haven’t invested in a commodity fund as yet and want to gain from the rising prices of commodities.

Comments: You need to have some knowledge of commodity cycles, how they work and affect the prices of commodities. Remember, various global factors will also affect the prices and, hence, your investment. So go through all the investment options and put your money in the one that you understand the best.

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