Monday, January 25, 2010

FIDELITY GLOBAL REAL ASSETS FUND


With Mr.Uday Puri, the National Sales Head of Fidelity India


AIMING TO BEAT INFLATION

Fidelity has come out with a New Fund Offer named Fidelity Global Real Assets Fund, an open ended Fund of Funds scheme. The Fund will invest about 65% in Fidelity Funds - Global Real Asset Securities Fund, an offshore fund launched by Fidelity Funds. The Parent Fund will in turn aim to invest in Companies which have exposure to physical assets like Gold, Copper, Minerals, Oil, Land, etc (That is why the name REAL ASSETS FUND).

In the Fund Managers' words, the Fund aims to invest in equities which have assets which are not easily replacable and are in short supply.


It is a known fact that investing in commodities, real estate ensures that you always make more money than inflation, as commody prices are known to harden.

POINTS IN FAVOUR OF THE FUND :

1. The fund can be a good geographical diversifier.

2. The Fund will benefit from Dynamic asset allocation across Real Assets.

3. Investing in this one fund will give you exposure to a wide range of commodities and real estate.

4. The Fund is well positioned to capture the growth in both Developed and developing world.

5. The biggest advantage of investing in this fund that the Fund will 'avoid' stocks which can be influenced by domestic economic pressures like telecom, financials, retail, pharma, etc. and thus give you a true Real Asset Exposure.

6. Even the currency risk is next to nil due to the fund's exposure to companies across geographies and across asset classes.

7. In its short history, the Fund has outperformed its benchmark by a massive 49% points. I would rank this fund higher than DSPBR World Mining Fund., as the DSP fund is more tilted towards Mining stocks only http://goodfundsadvisor.blogspot.com/2009/12/dspbr-world-mining-fund-unique-theme.html

NEGATIVE POINTS :

1. Of course, the biggest negative will be that the fund will not enjoy 'equity' tax status and is ineligible for tax concessions available to equity funds.

2. The Fund will rely heavily on commodity and they in turn are cyclical which could make the fund highly volatile. (However, the fund is fairly diversified as, besides commodities, the fund invests in Energy, utilities as well).

3. The Feeder Fund is not very old and thus has to prove itself during bearish times.

Still as the positives outweigh the negatives, I give a SUBSCRIBE call to the Fund, especially through SIPs.

Thankfully, SIP option is available to this NFO, take the SIP route to ride the volatility which is very likely with this fund.

Best of luck,

Srikanth Matrubai

Also visit http://goodfundsadvisor.blogspot.om



Also visit

http://equityadvise.blogspot.com

5 comments:

  1. Dear Srikanth,
    I regularly follow your blog.
    I tried buying this fund in SIP through ICICI Direct account.
    When I select the scheme and click on SIP it says : "This scheme is not enabled for SIP"

    Is it really available for SIP at time of NFO?

    ReplyDelete
  2. Of course the SIP option is available, I cross verified with the Fidelity people. Check at the ICICI end.

    ReplyDelete
  3. hello sir, this is Shilpa Agarwal BBA final year student. I m makin a project on mutual funds(govt vs private).I m luking for a proper sample of funds in both govt n private sector to compare.can u plz suggest some funds....

    ReplyDelete
  4. Dear Shilpa
    You can click on the label "fund call" on this blog to get details about the funds.

    ReplyDelete
  5. thanks a lot Sir....it was of great help for my project...your blog is really good....
    Regards,
    Shilpa Agarwal.

    ReplyDelete

Translate