Quant Mutual Fund announced the launch of the Quant Commodities Fund. The scheme opened for public subscription on December 08, 2023, and will close on December 22, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended sectoral/thematicequity scheme investing in commodity and commodity-related sectors.

This product is suitable for investors seeking

  • To generate long-term capital appreciation
  • An equity scheme that predominantly invests in companies engaged in commodity and commodity-related sectors.

What is the main objective of investing in this fund?

The objective of the scheme is 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. There is no assurance that the investment objective of the scheme will be realized.

Sandeep Tandon, CIO, Quant Mutual Fund said, “To ride this wave, and the resulting business cycle, we successfully launched several thematic funds which are strongly correlated with cyclical upturns. So, the launch of Quant Commodities Fund is a natural corollary of that belief that we are today at an opportune juncture where our VLRT framework indicates the medium term bottoming of Risk Appetite which will provide an impetus for a new business cycle, within which a commodities super cycle seems imminent.”

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment ofRs 5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Instruments

Indicative allocations (% of total assets)

Risk Profile

Minimum

Maximum

High/Medium/Low

Equity and equity-related instruments of companies engaged in commodity and commodity-related sectors

80%

100%

Very High

Equity and equity-related instruments other than companies engaged in commodity and commodity-related sectors

0%

20%

Very High

Debt, Units of debt mutual fund schemes and money market instruments

0%

20%

Low to Medium

Gold ETF, Silver ETF & or any other asset class in commodities as permissible by SEBI from time to time (excluding commodity derivatives)

0%

20%

Medium to High

Exchange Traded Commodity Derivatives (ETCDs) and or any other asset class in commodities as may be permitted by SEBI from time to time (subject to applicable SEBI limits)

0%

20%

Medium to High

Foreign equity and equity-related instruments and overseas ETFs

0%

20%

Very High

Units issued by REITs & InvITs

0%

10%

Very High

Are there similar mutual funds in the market?

To date, only one asset management company (AMC) has launched one such commodity fund, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

Mutual Fund House

Name of the Fund

10-year returns (in %)

ICICI Prudential Mutual Fund

ICICI Prudential Commodities Fund

Source: AMFI (As of December 11, 2023)

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked against the Nifty Commodities TRI. The Nifty Commodities Index is a market capitalization-based index, with a diversified portfolio of companies that represent various sectors within the commodities industry. A few of these sectors include oil and gas, consumable fuels, power, chemicals, metals and mining, construction materials, capital goods, etc.

The Trustee/AMC reserves the right to change the benchmark for the evaluation of the performance of the scheme from time to time, keeping in mind the investment objective of the scheme and the appropriateness of the benchmark, subject to SEBI guidelines and other prevalent guidelines.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under:

– For redemptions/switch-outs (including SIP/STP) within 15 days from the date of allotment of units, irrespective of the amount of investment: 1%

– Units issued on reinvestment of IDCW shall not be subject to load. No load shall be levied on switches between options and sub-options of the scheme.

Who will manage this scheme?

Varun Pattani, Ankit Pande, Sanjeev Sharma, and Vasav Sahgal are the designated fund managers of this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

 

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Published: 12 Dec 2023, 08:56 AM IST