Mirae Asset Global Commodity fund: Apt for high risk takers

Nature: Equity oriented open ended

Inception: July 2008

Assets under Management: Rs 40 crore at the end of March 2012

Fund Managers: Gopal Agrawal, Neelesh Surana and Basavraj Shetty

Analysis

• The fund has two components to its portfolio where one part is the international exposure and the other is the domestic holdings. At the end of September 2010 under the international portfolio investments Diversified Metals and Mining had the highest exposure at 23 per cent followed by Oil and Gas Exploration and Production along with Coal and Consumable Fuels each at around 10 percent. On the local portfolio investments petroleum products was the top sector followed by non ferrous metals. BHP Billiton the well known global mining company was the top holding at around 8 per cent of the portfolio. Some other companies with a high exposure were Hindalco, Reliance Industries, Oil Search Limited and Tambang Batubara Bukit Asam Limited. The benchmark index consisted of three MSCI indices with different weightages and the fund was underperforming the benchmark for the one year time period.
• At the end of March 2011 the situation in terms of the sector exposure remained the same. On the international portfolio front Diversified Metals and Mining was the top sector followed by Oil and Gas Exploration and Production while on the local portfolio side Petroleum products and ferrous metals were the top two sectors. 60 per cent of the portfolio was in international equities and 25 per cent in local equities. BHP Billiton was the top holding followed by China National Building Materia Ltd, Reliance Industries, HIndalco and Yanzhou Coal Mining Company Ltd. The fund had an equal exposure to China, India and Australia but was underperforming the benchmarks for the one year period and the time since inception.
• Six months later the situation on the sectoral front had not changed since the position six months earlier. Thus it was no surprise to find that the portfolio turnover ratio stood at 0.26 times which is quite low. In terms of the individual holdings BHP Billiton remained the top holding followed by Reliance Industries, Tambang Batubara Bukit, Orica Ltd and Oil Search Ltd.  India now had the highest exposure as far as the country position was concerned though this was marginal.  International equity holdings were still 55 per cent of the portfolio. The fund was underperforming over the one and three year time periods.
• At the end of March 2012 there was still stability on the sectoral front. For the international portfolio the highest exposure was to Diversified Metals and Mining followed by Oil and Gas Exploration and Production. On the local portfolio side the highest exposure was to petroleum products followed by ferrous metals. BHP Billiton had the highest exposure along with Reliance Industries and the fund saw its turnover ratio increasing to 0.4 times. The fund was very close in terms of performance as compared to the benchmark over the one and three year time periods.
• This fund is suitable for those who want a dedicated exposure to global commodity stocks and is hence meant for investors who have a higher risk appetite as well as having a large and diversified portfolio to afford such an exposure.