{"id":1161,"date":"2019-10-01T11:30:12","date_gmt":"2019-10-01T11:30:12","guid":{"rendered":"http:\/\/blog.certifiedfinancialguardian.com\/?p=1161"},"modified":"2019-10-01T11:58:30","modified_gmt":"2019-10-01T11:58:30","slug":"should-you-add-icici-prudential-commodities-fund-to-your-portfolio","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/10\/01\/should-you-add-icici-prudential-commodities-fund-to-your-portfolio\/","title":{"rendered":"Should You Add ICICI Prudential Commodities Fund To Your Portfolio?"},"content":{"rendered":"\n

ICICI Prudential Mutual Fund has launched a\nsectoral fund that will invest predominantly in stocks of companies that are a\npart of commodities and commodity-related sector.   Currently,\nthe equity markets are on a roller coaster ride. Despite the slew of\nannouncements by Ms Nirmala Sitharaman to boost the economy and push\nconsumption growth, the markets still have not been encouraging. <\/p>\n\n\n\n

Most of the Indian economic growth is\nconsumption-driven which is seen through the gross domestic product (GDP) rate. However, gross domestic product\u2019s recent figure pointed\nout to the slowest growth in six years due to weak demand and lower sales\ngrowth in key sectors such as the fast-moving consumer goods (FMCG) and\nautomobile industries.<\/p>\n\n\n\n

So, most of the FMCG companies have reported low earnings and dragged the\nmarkets down. In such times, however, the commodities sector did see some\ngrowth. Besides, commodities do act as hedge against inflation and investing in\nmetals like gold do help in protection of capital against market volatility.<\/p>\n\n\n\n

Thus, ICICI Prudential Mutual fund launched ICICI Prudential Commodities\nfund, that will allocate 80 to 100 per cent of its assets in stocks of\ncompanies that fall under the commodity sector and related activities. Metals,\ncement, paper, fertilizers and pesticides, energy, agriculture, textiles are some\nsuch sectors. Besides, the scheme will also make investments in companies not\nrelated to commodities and is permitted to invest in other instruments like\ndebt, money market instruments, other derivatives, gold and gold ETFs.<\/p>\n\n\n\n

Table 1: Details of ICICIPCF<\/em><\/strong><\/p>\n\n\n\n\n \n \n \n \n \n \n \n

\n Type<\/strong><\/td>\n 		An open-ended equity scheme investing primarily in commodities and commodity related sectors.<\/td>\n Category<\/strong><\/td>\n Thematic\/Sector (investing in commodities and commodity related sector)<\/td>\n <\/tr>\n
Investment Objective<\/strong><\/td>\n To generate long-term capital appreciation by creating a portfolio that is invested predominantly in Equity and Equity related securities of companies engaged in commodity and commodity related sectors.

\n However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.<\/td>\n <\/tr>\n
Min. Investment<\/strong><\/td>\n Rs 5,000 – (plus in multiples of Rs. 1)<\/td>\n Face Value<\/strong><\/td>\n Rs 10 per unit<\/td>\n <\/tr>\n
Plans <\/strong><\/td>\n \u2022 Regular

\n \u2022 Direct<\/td>\n 		Options<\/strong><\/td>\n
    \n
  • Growth (Option A) * <\/li>\n
  • Dividend (Option B) <\/li>\n
      \n
    • Payout Dividend  <\/li>\n
    • Reinvest Dividend*<\/li>\n <\/ul><\/ul>\n * default option<\/td>\n <\/tr>\n
Entry Load<\/strong><\/td>\n Nil<\/td>\n Exit Load<\/strong><\/td>\n
    \n
  • 1% of applicable Net Asset Value – If the amount sought to be redeemed or switch out is invested for a period of up to twelve months from the date of allotment<\/li>\n
  • Nil – If the amount, sought to be redeemed or switch out is invested for a period of more than twelve months from the date of allotment<\/li>\n <\/ul><\/td>\n <\/tr>\n
Fund Manager<\/strong><\/td> \n Mr Sankaran Naren and Mr. Mittul Kalawadia and the overseas investments of the Scheme will be managed by Ms Priyanka Khandelwal<\/td>\n Benchmark Index<\/strong><\/td>\n Nifty Commodities TRI<\/td>\n <\/tr>\n
Issue Opens:<\/strong><\/td>\n September 25, 2019<\/td>\n Issue Closes:<\/strong><\/td>\n October 09, 2019<\/td>\n <\/tr>\n <\/table>\n\n\n\n
(Source: Scheme Information Document<\/a>)<\/span><\/center>\n\n\n\n

What is the Asset Allocation of ICICI Prudential Commodities Fund?<\/strong><\/p>\n\n\n\n

Under normal circumstances, the scheme\u2019s asset allocation<\/a> or asset distribution weight will be as under. <\/strong><\/p>\n\n\n\n

Table 2: ICICIPCF’s Asset Allocation<\/em><\/strong><\/p>\n\n\n\n\n \n \n \n \n \n \n \n \n
Instruments<\/strong><\/td>\n Indicative Allocation (% of Total Assets)<\/strong><\/td>\n Risk Profile<\/strong><\/td>\n <\/tr>\n
Maximum<\/strong><\/td>\n Minimum<\/strong><\/td>\n <\/tr>\n
Equity & Equity related instruments of companies engaged in commodity and commodity related sectors*<\/td>\n 100<\/td>\n 80<\/td>\n High<\/td>\n <\/tr>\n
Other equity and equity related securities<\/td>\n 20<\/td>\n 0<\/td>\n High<\/td>\n <\/tr>\n
Debt, Units of debt Mutual Fund schemes and Money market instruments.<\/td>\n 20<\/td>\n 0<\/td>\n Low to Medium<\/td>\n <\/tr>\n
Units issued by REITs\/ InvITs<\/td>\n 10<\/td>\n 0<\/td>\n Medium to High<\/td>\n <\/tr>\n
Gold ETF\/ other asset classes as may be permitted by SEBI from time to time (subject to applicable SEBI limits)<\/td>\n 20<\/td>\n 0<\/td>\n Medium to High<\/td>\n <\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
(Source: Scheme Information Document<\/a>)<\/span><\/center>\n *The Scheme will invest in companies classified under \u2018Commodities \u2018as per Industry classification issued by AMFI from time to time. Examples of sectors classified under \u2018Commodities \u2018are as follows:\n
    \n
  1. Paper <\/li>\n
  2. Cement and Cement Products, <\/li>\n
  3. Metals (including, Ferrous Metals, Non- Ferrous Metals, Minerals & Mining etc.), <\/li>\n
  4. Chemicals,<\/li>\n
  5. Fertilizers and Pesticides, etc. <\/li><\/ol>\nThe Scheme may also take exposure to: \n