SBI MF launches commodity fund

SBI Mutual Fund (SBI MF) has targeted to raise up to Rs 500 crore through its commodity-based equity fund Magnum Comma Fund, which will invest the corpus in stocks from oil & gas, metals, chemicals and agriculture sector.

The new scheme, which opened for subscription on June 30 would close on July 25, P G R Prasad, managing director and chief executive of SBI MF, said today.

SBI MF would target retail investors, and expects to raise Rs 300-500 crore during the offer period, he added.

Explaining the rationale for the new scheme, Prasad said investors could benefit from upside of the commodity cycle.Currently, global commodity price cycle is in the midst of a strong uptrend and India would drive global prices in the next few years due to huge domestic demand for commodities like oil and gas, he said.

The scheme could also benefit from the contrarian co-relation with broad markets wherein the user industry stocks come down as commodity prices go up, Prasad said.

The scheme would have just over 20 commodity stocks in its portfolio selected from the universe of 100 stocks, he added.