DSP BlackRock World Energy Fund NFO: Review Analysis & Details

There comes another fund from DSP BlackRock Mutual Fund House. it's raining mutual fund NFO's in the Indian Mutual Funds Market.
The DSP BlackRock Mutual Fund house has come out with its New Fund offer or NFO. They have launched a new fund called the DSP BlackRock World Energy Fund.
In this article, we will analyse how good is this DSP BlackRock World Energy Fund NFO, whether this DSP BlackRock World Energy Fund offers anything new or unique for the investors and whether the investors should invest in DSP BlackRock World Energy Fund .

Let's begin with some details about DSP BlackRock World Energy Fund.

What are the NFO dates for DSP BlackRock World Energy Fund ?
The NFO for DSP BlackRock World Energy Fund will open on July 10, 2009 and will close on July 31, 2009.

What is so unique about this DSP BlackRock World Energy Fund ?
All the investors willing to take a shot at DSP BlackRock World Energy Fund should understand that this is actually a Fund of Funds (What's this?). What it means is that this fund will not invest in any companies or stocks diectly, instead it will invest in other funds. Another example is Blackrock Absolute Return Strategies Fund

Now which are these other funds for DSP BlackRock World Energy Fund?
The scheme mentions investments in 2 funds:
- BlackRock Global Funds – World Energy Fund and
- BlackRock Global Funds – New Energy Fund.

They both are international funds, specific to energy sector, hence there may possibly be a forex risk involved. Investors must be aware of this.

Also, they mention that the fund manager may at his discretion, invest in other international or overseas mutual fund. Hence, it all depends on the investment manager.

There are various investment options available:
• Growth Option
• Dividend Option
- Payout Dividend
- Reinvest Dividend

Minimum Application amount stands at Rs 5000, while Minimum installment for SIP is at 1000.

The entry load is as follows:
For investment amount: < Rs. 5 Crore – 2.25% of the initial value of Rs. 10/-during NFO/Applicable NAV during Continuous Offer
>= Rs. 5 crore – NIL
No Entry Load charged on Direct Applications, i.e. applications not routed through a distributor/ agent/ broker

Exit Load:
Holding period from date of allotment:
< 6 months : 1.00%
>= 6 months but < 12 months: 0.50%
> = 12 months : NIL

Benchmark Index for DSP BlackRock World Energy Fund:
- 70% MSCI World Energy (Net)
- 30% MSCI World (Net)

DSP BlackRock World Energy Fund NFO offer price: Rs. 10 per unit plus applicable load, if any.

Final Thoughts about the DSP BlackRock World Energy Fund?
Overall, this fund is betting on the Energy sector at both global and local level. However, there are some risk elements in this fund. It is a fund of funds as explained above, so the ultimate performance depends upon how the actual funds perform and how the stocks which those funds have invested in perform. Hence, there is a forex risk involved.
On the plus side, it offers you exposure to your investments at international level. Suppose that Energy sector in India does not grow that well but it does at a global level, then the investors of this fund of funds may benefit. Investors have to take the call