Deutsche Mutual Fund is launching an offshore ‘fund of funds’ scheme that will focus on global agri-businesses. Its underlying fund, though, has shown poor performance
Deutsche Asset Management today announced the launch of the DWS Global Agribusiness Offshore Fund (DGAOF). Sadly, the past performance of the underlying fund does not lend credence to its investment philosophy.
DWS has launched an open-ended overseas ‘Fund of Funds’ scheme. It will raise money from Indian investors and put it in DWS Invest Global Agribusiness Fund, managed by Deutsche Investment Management, Americas Inc. DGAOF will invest predominantly in units of this underlying fund, which is registered in Luxembourg.
However, the historical performance of the DWS Invest Global Agribusiness Fund is pathetic. Although it has beaten its benchmark index, the MSCI World Index, the actual returns are terrible in the context of exceptional returns that the Indian equity market has offered. Since inception in November 2006, the Fund has provided returns of just 4.18%. Over three years, the performance is even more skewed, with returns of 1.84%.
The Fund’s objective is to generate long-term capital growth by investing predominantly in units of overseas mutual funds, focusing on the anticipated growth in agriculture and would include affiliated and allied sectors.
The rationale behind the Fund’s objective is to capture the opportunity arising out of the pressure on food prices on account of a rising global population and incomes. The likely rise in global food consumption will benefit companies with a strong focus on agri-businesses.
Speaking at the launch, Suresh Soni, CEO, Deutsche Asset Management said, “The DWS Global Agribusiness Offshore Fund invests in that most basic human need: food. That is not novel but our idea to invest in all parts of the agribusiness chain is unique. Not only does this offer investors an opportunity to diversify their investments beyond the local market, but the global scope and the wide array of sectors that the Fund could invest in, will potentially help investors benefit from interesting opportunities around the globe.”
DWS Global Agribusiness intends to invest in the entire spectrum of businesses related to food production—from agricultural commodities to consumer products. The Fund intends to invest in companies in land and plantation, seeds and fertilisers, planting, harvesting, protecting and irrigation, food processing and manufacturing companies.
Expect lacklustre trade for the rest of the week; the rally may be about to end in the short-term. But medium term outlook remains bright
The BSE Sensex edged higher than the previous day’s close after trading in a narrow range. The index closed 5.69 points higher (0.03%) at 17,941 and the Nifty closed 2.4 points lower (0.04%) at 5,366 points. We expect the market to remain listless for the next few days and even decline before a fresh rally begins.
In afternoon trading, the Sensex touched a 25-month high after which it pared its gains. It is now close to the psychologically important 18,000 level. Asian stocks were trading mixed today as markets consolidated after recent strong gains. Key benchmark indices in China, South Korea, Singapore and Taiwan were up 0.02% to 0.8%. The key benchmark indices in Japan and Indonesia were down by between 0.5% and 0.5% respectively. Markets in Hong Kong and Thailand were shut for holidays.
US markets ended higher on Monday, (5th April), on strong non-farm payrolls report and other positive economic data. The Dow Jones Industrial Average and S&P 500 closed at their highest levels since September 2008, while the Nasdaq closed at its highest level since August 2008. The Dow climbed 46.48 points to 10,973. The Nasdaq gained 27 points to 2,429 while the S&P 500 moved 9 points higher to 1,187.
Closer home, the finance ministry has suggested the simplification of the rules for calculating foreign investment in India. The proposed rule which takes out the sundry entries of indirect investment will be beneficial for companies with high foreign investments. The government initiative towards the GST (Goods & Services Tax) regime has started, with the Centre seeking opinion from the Supreme Court on the proposed amendments to the Constitution for the implementation of the tax. The largest bank of the nation, State Bank of India (SBI), said that it may raise lending and deposit rates within a few months.
The Bank will wait for the Reserve Bank of India’s (RBI’s) policy action before raising rates. Grain stocks as on 1st April stood at 42.8 million tonnes (MT) which are well above the target, the government said today. While wheat stocks were at 16.1MT against a target of 4MT, rice stocks were at 26.7MT, more than double the targeted 12.2MT. US treasury secretary Timothy Geithner said that India and the US should work together on “rebalancing” the world economy. In the bilateral economic partnership talks, he said that cooperation by both the parties will help to make the economy more stable.
Foreign institutional investors were net buyers of Rs766 crore on Monday. Domestic institutional investors were net buyers of Rs403 crore. The rupee was strong on continued capital inflows.
Sales of Tata Steel (up 1.3%) rose 18% in FY10 from the year-ago period. Castrol India (up 4.1%) issued 1:1 bonus shares. BHEL (up 2.8%) plans to reenter the wind turbine manufacturing business with foreign cooperation. NTPC (up 0.4%) plans to add up to 4,000MW-5,000MW of power in FY11. The company plans capital expenditure of
Rs28,000 crore-Rs29,000 crore—70% of which will be met through debt.
DLF (up 2%) has appointed an advisor to find buyers for Aman Resorts, a luxury hotel chain it had acquired in November 2007, for $400 million. Tata Motors (down 0.9%) reported a 38% jump in sales in March 2010 from a year earlier. Reliance Infrastructure (up 1.9%) has commissioned a 600MW unit at the Rajiv Gandhi Khedar thermal power plant at Hisar in Haryana. Bank stocks edged lower on fears of a possible interest rate tightening by the RBI to control inflation. IT company Persistent Systems was listed on the bourses today. The company had priced its initial public offer at the upper end of the Rs290-Rs310 per share price band. CESC (down 0.8%) has raised Rs50 crore by selling short-term debt to a mutual fund. It sold commercial paper yielding 4.05%, maturing on 22 June 2010.
However, growth has fallen short of the 580-million tonne target set by the government for the previous fiscal
Cargo traffic handled by the top 12 major ports grew by 5.68% to 560.68 million tonnes (MT) in the just-concluded fiscal against 530.35MT in 2008-09, indicating revival in exports as the world economy started to recover from the impact of the global financial meltdown.
“Our 12 major ports handled 560.68MT (of) cargo traffic in 2009-10, registering a growth of 5.68%. This shows buoyant growth in our maritime trade, coupled with indications of revival in exports,” joint shipping secretary Rakesh Srivastava told PTI today. He, however, admitted that this growth is 3.5% short of the 580-MT target set by the ministry for the fiscal year.
The 12 state-owned major ports—Mumbai, Jawaharlal Nehru Port Trust, Kolkata (with Haldia), Chennai, Visakhapatnam, Cochin, Paradip, New Mangalore, Mormugao, Ennore, Tuticorin and Kandla had handled 530.35MT of cargo in 2008-09.
Mr Srivastava said though the traffic handled in 2009-10 fell short by 3.5% from meeting the 580-MT target set by the ministry for the fiscal, the growth was satisfactory given the adverse circumstances that the maritime trade faced in the wake of the global economic crisis.
The 5.68% growth during the past fiscal, he said, is more than double the mere 2.13% increase in port traffic reported in 2008-09.
The rise in port traffic during the last fiscal was triggered by a 21.02% jump in cargo growth to 78.22MT, coupled with a 6.25% rise in iron ore traffic, which increased to 102MT, the joint secretary said.
Most of the commodities handled by these ports reported growth in the last fiscal year, compared with the previous year, barring petroleum, oil & lubricants (POL), which declined by a hefty 37% to 197.21MT, the secretary said, adding that container traffic, which was hit directly earlier due to the global financial meltdown, grew by 4.32% in the reporting fiscal.
During 2007-08, cargo traffic had grown by 11.94% at 519.15MT over 463.78MT in 2006-07.