Wednesday, March 26, 2008

Mutual Fund Advise

One investor Aryan asked ::

"I am looking to invest in Mutual funds. As the commodities market is booming will it be a good idea to invest in mutual funds which have high investment allocation in commodity segment?????

If the answer is yes which MFs shd i invest in..

Thanks in advance"


Dear Aryan,
Your decision to invest in mutual funds is good. But putting your entire money in commondity funds is not a good thing to do. As a Asset Allocation, you could invest upto 10% of your portfolio in Commondity funds of which SBI Magnum Comma Fund would the top pick simply for its excellent track record and consistent performance. You may also look at the NFO DSP ML Natural Resources and New Energy fund.
As prudent Asset Allocation you should also consider investing in DSP ML World Gold Fund which invests in Gold Mining companies worldwide and has given double the returns of Gold since inception.
As usual, investing through Systematic Investment Plan for better returns as they help you ride through market volatility., and as you may be aware, commodities are very very volatile.
Best of luck.

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