This is the first mutual fund scheme to bet on commodity derivates. Recently, the market regulator Sebi has given its nod to mutual funds to invest in commodity derviatives.
According to Tata Mutual Fund, the scheme will invest up to 25% of its asset under management in ETCDs where a single commodity exposure is 10% of the AUM.
The fund will be managed by heads of the respective asset classes – Rahul Singh, Chief Investment Officer - Equities, Murthy Nagarajan, Head - Fixed Income, Aurobinda Prasad Gayan, Head- Commodities Strategy, and Sailesh Jain, Fund Manager at Tata Asset Management.
Should you invest?
Mutual fund advisors always maintain that investors need not opt for an NFO unless it brings something new to the table. Since Tata Multi Asset Opportunities Fund is the first scheme to have a commodity exposure in the Indian mutual fund industry, should investors make an exception?
“It is a unique mix of asset classes. Multi asset funds give investors the opportunity to bet on different asset classes while maintaining the overall risk. For those who understand commodities well and want to take a tactical call via mutual funds can opt for the new scheme," says Gaurav Monga, Director, PxG Consultants.
"However, for retail investors, commodity investing might not be a great idea at this point,” says Gaurav Monga. He points out that the multi asset schemes as a category are very new and nobody knows how the category will perform in the long term. He believes that retail investors should stick to equity, debt and diversifiers like gold funds. “Retail investors should make it a point to invest only in themes and schemes which have proved their mettle in the long term,” says Gaurav Monga.
Scheme at a glance:
Name: Tata Multi Asset Opportunities Fund
Category: Multi Asset Allocation
NFO closes on: 28 February
Minimum investment: Rs 5,000
Exit Load: 1% on redemption within one year
Benchmark: S&P BSE 200 TRI (65), MCX I-COMDEX Composite Index (20), CRISIL Short-Term Bond (15)
Fund managers: Rahul Singh, Murthy Nagarajan, Aurobinda Prasad Gayan and Sailesh Jain
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