Wednesday, December 16, 2009

DSPBR WORLD MINING FUND - UNIQUE THEME

FOR THE HIGH RISK APPETITE INVESTOR

DSP BlackRock World Mining Fund
After two sucessful Fund of Funds, in DSPBR World Gold Fund and DSPBR World Energy Fund, DSP BlackRock has come out with its 3rd Fund of Funds DSP BlackRock World Mining Fund.
The fund will invest in the BlackRock Global Funds’ World Mining Fund, which has a corpus of about Rs 51,000 crore and invests in mi

ning companies across the world, with operations in precio

us metals, coal, iron ore and copper among others.
The BGF World Mining Fund has been in existence for a period of more than 12 years and has a great performance track record.

The fund has outperformed its benchmark HSBC Global Mining Index over one and five-year periods. The Fund has given a return of 17.8%

CAGR compared to its Benchmark return of 12.7%.

The Fund has been awarded the maximum AAA ratings from both Standard & Poor’s and OBSR.





COMMENT AND SUGGESTION :

After the 2007 highs and the subsequent crash, commmodity prices are stablising and moving up steadily. Supply constraints and the Weak Dollar will make Commodities costlier and the Fund should benefit from this strong prices in commodities.

The Fund will give you both Sector diversification as well as Geographical diversification.
An investor interested in a concentrated portfolio of commodities and the mining sector in the medium to long term should consider investing in this fund.

Risks :

There is an exchange risk. If the rupee depreciates, it adds to the return of the fund since the investment is in a non-rupee asset. Likewise, if the rupee appreciates it would potentially reduce the return of this fund.
There is a Sector Risk with this Fund as the Fund will be fully exposed to the fortunes of the Mining Sector.

Suggestion :
The Fund has given excellent returns and has had a great trackrecord. Invest with a medium to long term view and do not have more than 5% exposure, depending on your risk appetite.

Note, the NFO does not have a SIP. If you want to invest through SIP, you have to wait for the Fund to reopen for regular purchase.



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