Aditya Birla Sun Life Commodity Mutual Funds

Investment Objective:

Aditya Birla Commodity Equities Fund allows investors to grow their finances by investing in world-class ventures around the globe. The five major holdings of Aditya Birla Sun Life Commodity Equities Fund are Archer Daniels Midland Co. Ltd., CF Industries Holdings Inc, Nutrien Ltd., Bunge Ltd., and Mosaic Company Ltd. It provides 65% exposure towards the domestic market. Additionally, the scheme stimulates investors’ returns through stock investments rooted in the S&P Global Agribusiness Index. 

Risks Involved in Aditya Birla Commodity Equities Funds

Investing in Aditya Birla Commodity Equities Fund involves higher risk than investing funds in stocks and bonds. The commodity fund markets are highly volatile and complex. To secure higher returns in the commodity fund category, you will need expertise and an understanding of commodity trading. Any market fluctuation will significantly affect the returns as the investment returns are directly linked to the commodity’s price. Commodities are freely traded, making them prone to global supply and demand. Additionally, commodity trading is uncertain, thus suitable for investors with high-risk tolerance capabilities. 

Return Potential of Aditya Birla Commodity Mutual Funds

As commodity funds have a huge customer demand and commercial value, the returns are derived from the commodity’s market performance. Aditya Birla Commodity Equities Fund returns clocked at 14.98% in the past year. Since its inception, Aditya Birla Commodity Mutual Funds has delivered annual returns of 8.55% on average. Simply put, the fund delivered returns equal to double the invested amount within three years. 

Who Should Invest in Aditya Birla Commodity Equities Fund?

Aditya Birla Commodity Equities Fund is highly suitable for investors seeking long-term capital growth. Individuals with an investment horizon of five years or longer who look forward to tax-efficient investment instruments should invest in Aditya Birla Commodity Mutual Funds. Try your hand on commodity funds only when you are well-versed with market trends and have a moderate to high-risk profile. 

Things To Consider Before Investing in Aditya Birla Commodity Mutual Funds

Initially, the investor must consider the Aditya Birla Commodity Equity Fund’s performance. Secondly, consider the cost of funds, including expense ratio and exit load. Moreover, evaluate your risk tolerance capabilities. Determine whether you are ready to bear the involved risk and can cope with the losses in case of market fluctuations. Be clear with your investment objectives, and see whether the Aditya Birla Commodity Mutual Funds fulfil your investment objectives. 

Tax on Aditya Birla Commodity Equities Funds

When sold after one year tenure, it will fall into the Long Term Capital Gains (LTCG) category. Therefore, a 10% tax rate would be applicable when the gain surpasses the limit of one lakh. If the investor sold the assets within one year, it would fall in the Short Term Capital Gains (STCG) category. So, the applicable tax will be 15%, excluding cess or surcharge.