Another renowned mutual fund house, DSP BlackRock, has come out with a new fund offer or NFO, for its newly launched fund called DSP BlackRock World Agriculture Fund
The DSP BlackRock Mutual Fund House is launching their DSP BlackRock World Agriculture Fund. In this article, we will analyze how good is this DSP BlackRock World Agriculture Fund NFO, whether this DSP BlackRock World Agriculture Fund offers anything new or unique for the investors and whether the investors should invest in DSP BlackRock World Agriculture Fund.
DSP BlackRock World Agriculture Fund NFO: Review Analysis & Details
Let's begin with some basic details about DSP BlackRock World Agriculture Fund.What are the NFO dates for DSP BlackRock World Agriculture Fund?
The NFO period for DSP BlackRock World Agriculture Fund is from 30 September and will close on 14 October 2011. After the NFO period, the regular buying and redemption of fund units will start, but the precise date is not known.
What is so unique about this DSP BlackRock World Agriculture Fund?
Investors should undestand this very clearly 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 fund, Called BlackRock Global Funds-World Agriculture Fund. It is this fund which will invest in stocks/companies in the agriculture sector at a global level.
A related NFO for a Fund of Funds is offered by DSP Merrill Lynch but it is in the energy sector. It is DSP BlackRock World Energy Fund. Another example is Blackrock Absolute Return Strategies Fund
So investors should be aware that they are actually putting their money into the Global Agri fund and that exposes them to the forex currency risk. What if the return of the BlackRock Global Funds-World Agriculture Fund is 25%, but because of currency fluctuations, the net returns you receive comes down to just 12%.
The main idea behind investing in agricultural sector through this fund is that there is imbalance between food supply and demand. And being a basic need, there is a lot of good return opportunity by investing in agriculture sector. All these assumptions are based upon increasing world population needing more food, thereby making good profitable opportunitites for agriculture based businesses and hence the companies in the agri sector which this fund will choose to invest. Ultimately, its the skills of the fund managers to pick the right company for better returns.
What are the other competitor products available in comparison to DSP BlackRock World Agriculture Fund?
There are no agriculture fund details available with FT Times as of now, but there are other commodity funds which may provide some exposure to agri sector in India like Mirae Asset Global Commodity Stock Fund or SBI Magnum COMMA Fund
What are the risks of investing and trading DSP BlackRock World Agriculture Fund?
The benchmark for DSP BlackRock World Agriculture Fund Fund is the DAX Global Agribusiness Index. By investing in such a fund, you are taking the risk on forex as explained above.
Also being fund of funds, If the returns from the end fund fluctuates, so will the returns generated from this fund will keep fluctuating in either direction.
Final Thoughts about DSP BlackRock World Agriculture Fund?
Another fund of fund which is focussed on the Agriculture sector. A good option for investors who believe that this fund of funds will enable them to get good returns besides the forex risk and global exposure risk.
See List of All Mutual Fund and NFO Articles here
During NFO period each unit cost Rs. 10 per unit
Minimum investment Rs 5,000 and in multiples of Re 1 afterwards.
No tax benefit will be available in DSP BlackRock World Agriculture Fund
Mr. Mehul Jani will be the fund manager for DSP BlackRock World Agriculture Fund.
Multiple options available for investments in DSP BlackRock World Agriculture Fund :
Growth Option
Dividend Option - Payout, Reinvestment facilities
DSP BlackRock World Agriculture Fund Entry Load: Nil
DSP BlackRock World Agriculture Fund Exit Load: 1% if exit within 1 year
NIL beyond 1 year.
SIP or systematic investment plan? No specific details available
DAX Global Agribusiness Index will be the benchmark for tracking the performance of DSP BlackRock World Agriculture Fund
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