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Wednesday, Jul 06, 2005

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SBI MF launches fund focussing on commodity stocks

Our Bureau

Mumbai , July 5

SBI MUTUAL Fund is seeking to raise Rs 300-500 crore from its new commodities-based equity fund.

The SBI Magnum Comma fund seeks to invest in a portfolio of companies who are in the commodity business of oil and gas, metals, materials and agriculture. The rationale behind the launch of the fund is that commodity stocks have outperformed the stock market benchmarks by impressive margins, said Mr P.G.R. Prasad, Managing Director and Chief Executive Officer, SBI Mutual Fund.

In the present scenario, commodity stocks have low price earnings ratio and high dividend yield, according to Mr N. Sethuram, Chief Investment Officer, SBI Mutual Fund.

Societe Generale Asset Management, which holds 37 per cent in SBI Mutual Fund, has global experience in managing commodity funds. Investment and marketing professionals from Societe Generale have been deputed to SBI Mutual Fund to help manage the fund.

This fund is viewed as an additional investment vehicle for investors, Mr Sethuram said. The portfolio will have an investing universe of over 100 scrips. Of this, 20-40 scrips would be invested in, he added.

SBI Mutual Fund is also seeking to start a new offshore fund. The size of this fund is expected to be Rs 500 crore and the target audience would be in markets in West Asia and far east, Mr Prasad said. The fund house would also launch its portfolio management service by September 2005. The target for this service is Rs 700-800 crore.

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