International Mutual Funds can benefit you!

By | April 23, 2011

Mutual Funds relating to the agro and commodities market can benefit you, as it has been forecasted to be on the bull- run for quite a long time now.  If you thought the rising food prices were a matter of concern as it increases the your expenditure or even force you to borrow a loan for financing your expenditure then why not take the advantage of such markets?

Agriculture linked MFs:

With increased industrialization in developing countries, it is likely that the agro lands will be converted to industrial lands, reducing the agricultural area. This in turn puts pressure on the farming activities where grains may not be abundant; leading to a rise in the food prices.

Investing in funds like the DWS Global Agribusiness Offshore Fund and Birla Sun Life Commodity Equities -Global Agri Ret Fund etc can increase your savings corpus to a good level.

Commodities linked MFs:

The next hot spot is the commodities market.  Till the year 2002 almost each individual commodity – both metals and agriculture – hit all-time lows… the prices fell by an average of 70% in real terms. However, since 2002, commodity prices have been on a bull run.

With the continual rise in the Industrial revolution across industries in the developed countries, the need for hydrocarbons, which is their main raw material, increases. Mutual funds like DSP Blackrock World Mining Fund, DSP Blackrock World Energy Fund, Fidelity Global Real Assets Fund and ING Optimix Global Commodities Fund etc can provide the opportunity to invest into global markets as the Indian market may not be beneficial.

Gold and silver linked MFs:

The reason why this market seems to be booming is because most economies in the world need to print more and more money if they want to get out of their debt trap.

While investors in India can invest in gold through gold exchange traded funds (ETFs), there is also an option for investing in international funds primarily investing in gold and silver mining companies.  But investing in gold ETFs can get a little risky because the share prices of gold and silver mining companies tend to fall faster than the price of gold, i.e., if the price of gold falls. Investors looking to take the risk could look at AIG World Gold Fund and DSP Blackrock World Gold Fund to utilize the bullish condition of this market.

The downside:

Since these funds are not based in India, you will be taxed with capital gains, as they will be categorized as debt funds. But, this should not be a matter of prime concern since investing in properties at home also bears a capital gain tax.  If you have the idea of building a size able amount of your corpus, give it a shot and invest funds into these avenues. Make sure that you have read the terms and conditions in order to take care of any liabilities, if any, that can occur in future. Availing a personal loan to get out of debts or spending for your basic expenses is not a like able situation.  Ensure that you invest the right amount of funds and take full advantage of these inflationary opportunities.

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