In this latest episode of Mutual Fund Corner, CNBC-TV18’s Sumaira Abidi spoke to Vishal Dhawan, Founder and Chief Executive Officer at Plan Ahead Wealth Advisers, to discuss commodities’ exposure in the portfolio.
Dhawan said, “There are really two options for anyone who wants to build out commodity exposure, one is you try to figure out whether you can buy a fund or an ETF, which tracks the commodity index directly. Now, unfortunately, there are no such products available in India and therefore, it’s hard to find a sort of perfect way to buy commodities directly.”
He added, “The next best thing is to buy the commodity index, which is based on the equities of companies which are in the commodity business. I must say that this is a much more volatile space, therefore, if you want to buy exposure in India, especially through a mutual fund sort of instrument, then you can look at a few options. You have the DSP option which is available, which is the Natural Resources and New Energy option. You have an ICICI Pru Commodities fund, you have a Tata Resources and Energy fund. But all of these are very, very higher risk because the volatility on commodities tends to be much higher, and therefore, I think investors need to be ready for this wave that we have seen this year as well, whenever they take a commodity exposure into their portfolio.”
Watch video for more