Tata Mutual Fund has launched 'Tata Multi Asset Opportunities Fund'. This fund will invest broadly in the three asset classes – equity, exchange traded commodity derivatives and debt.
SEBI has recently allowed fund houses to invest in commodity derivatives.
Exchange-traded commodity derivatives (ETCDs) allow the investor to invest in commodities like base metals, agricultural commodities, industrial chemicals, crude oil, etc. The fund will invest up to 25% of its AUM in ETCDs where a single commodity exposure is 10% of the AUM.
In a press release, Prathit Bhobe, CEO & MD, Tata Asset Management said, "This product will generate interest from investors and distribution partners. This fund is an Industry first fund that invest in commodity derivatives.”
Rahul Singh, CIO-Equities, Tata Asset Management added, "Negative correlation between different assets ensures not all investments fail at the same time giving stability to the portfolio. Diversification and low correlation across equity, commodities, fixed income as well as returns in commodity arbitrage to reduce risk with less volatile returns and have consistency of return. Also, equity taxation will be ensured for better net returns to the investor.”
