Funds targeting natural resources for investment
The fund houses are targeting natural resources for investment. But Indian regulations do not permit mutual funds to invest directly in commodities. However fund houses have come out with schemes that will invest in stocks of mining companies abroad, since there is no mining companies here in India. However the market for new fund offerings (NFOs) is not very active these days. Even Morgan Stanley and Mirae struggled to raise even Rs 100 crore in their recent NFOs. Also, performance of recently launched commodity-oriented funds has been mixed.
Reliance Mutual Fund’s Natural Resources Fund received an overwhelming response (nearly Rs 6000 crore) in terms of subscription, its net asset value is below par at the moment.
DSP Merrill Lynch’s World Gold Fund have invested directly in the stocks of the companies that are part of the global gold mining and refining industry. Kindly note that the fund has delivered handsome returns since inception, beating most classical equity funds.
ING have file for a commodity- oriented fund and has filed for two schemes.
ING natural resources fund will invest in companies in sectors across the globe.
ING the Latin America Fund (the natural resources sector) will invest specifically in firms in Latin America continent, for instance Brazil, one of the largest countries in Latin America, is the largest producer of coffee, orange juice, sugar, ethanol and the fourth largest exporter of steel in the world.
HSBC Agri and Natural Resources Fund and Tata Natural Resources Fund propose to invest in companies directly or indirectly associated with “extraction or production of commodities from natural resources.”
