ABSL Commodity Equities Fund tops international category with 18% returns
According to Value Research, a mutual fund tracking firm, Aditya Birla Sun Life Commodity Equities Fund – Global Agri Plan is offering 18.11% return in one year, 18.99% in three years, and 13.03% in five years.
This scheme is the topper in the list of returns in the International Fund category, which is followed by DSP World Mining Fund with a return of 11.10% in one year.
Aditya Birla Sun Life Equities Fund – Global Agri Plan invests in stocks of companies focusing on agri-commodities products. The rise in prices of agri-commodities and fertilizers have helped the scheme to perform better.
“These sectors are well positioned for the current environment of geopolitical uncertainty and high inflation. The fund is also well-diversified geographically across North and South America, Europe, Africa, Asia and Japan, with roughly 18-22% allocation to each geography,” said Mahesh Patil, Chief Investment Officer, Aditya Aditya Birla Sun Life Mutual Fund.
Commodity prices are soaring across the globe due to multiple factors. Primarily, Russia-Ukraine war has pushed food and energy prices to fresh highs, triggering food security concerns and putting pressure on households worldwide. Russia is a major exporter of some of the world’s most important commodities therefore Russia’s invasion of Ukraine and the consequent sanctions imposed by various western countries disrupted trade in commodities. This has led to an increase in prices of key commodities.
Mutual fund participants say investors should not look at the returns in the last six months or one year and take investment decisions because commodity prices are unpredictable. They may ease once the war and other uncertainty across the globe eases. “Such schemes are doing well now as the prices are high and once prices cool down then we can see fall in returns on these schemes,” said Suresh Sadagopan, managing director, Ladder7 Wealth Planners Pvt Ltd.
At the moment, you cannot invest in international funds as fund houses can’t accept fresh investments in international funds. AMFI in February has directed mutual fund houses to stop accepting investment in schemes dedicated to overseas stocks after the investment limit of $7 billion for the mutual fund industry set by the SEBI was breached.