SBI MF launches commodity based equity fund

SBI Mutual Fund announced the launch of the first ever commodity-based equity fund Magnum Comma Fund, with a view to offering investors an opportunity to invest in a dedicated commodity sector fund.

The Comma Fund plans to invest in a portfolio of stocks of oil and gas, metals, chemicals and agriculture companies.

P G R Prasad, managing director and CEO, SBI MF, at the launch of the new fund said, "Commodity stocks have outperformed the stock market benchmarks by impressive margins. These stocks enjoy a positive correlation to inflation and the new fund would be a hedge against inflation. Currently, we are in the midst of a commodity boom and SBI MF is ideally placed to leverage these positives."

Global asset management company Societe Generale Asset Management (SGAM), which has 37 per cent stake in SBI Mutual Fund, has extensive expertise in investing in commodity sectors. It is also running a World Commodity Fund.

SBI Mutual Fund would benefit from this expertise in picking up the trends, Prasad added. "Generally, commodity cycles are of long duration average being 17 years. After a long bearish phase, the domestic commodity sector is passing through a bull phase since 1999 and we expect the trend to continue," Prasad said.

The new fund opened for subscription on June 30 and would close on July 25. The scheme will have a minimum application amount of Rs 5,000 and multiples of Rs 1,000 per application. There is no entry load at the time of application.