The commodities futures committee is headed by Sanjiv Shah of Benchmark Asset Management Company (AMC), while the committee on capital guarantee products is being jointly chaired by Naval Bir Kumar of Standard Chartered Mutual Fund and AK Sridhar of UTI Mutual Fund. The commodities committee is expected to submit its report by the end of the first quarter, as per Mr Shah of Benchmark AMC.
Speaking to the FE, AP Kurian, chairman, Amfi said: This is the right time for the mutual fund industry to expand its kitty of products, as investors, by and large, are now routing their investments through MFs. Commodities futures look very lucrative as they have volumes worth Rs 400-500 crore everyday. Similarly, we also want to explore the possibilities of launching capital guarantee products for Indian investors. The global models of the same are quiet popular with investors across all ages.
On the prospects of launching products dedicated to commodities futures, an official from Sunidhi Commodities said: As the commodities trading is on the rise in India, MFs will fuel further trading in commodities exchanges, and will be able to provide option to the smaller investors for investing into the commodities. u
However, a section of the industry is not in support of the move.An industry analyst said: The purpose of setting commodity exchanges was to safeguard the interest of the farming community from international onslaught. Opening investment opportunity for MFs would fuel speculative activity by the operators. Speaking to FE about capital guarantee products, AK Sridhar, CIO UTI Mutual Fund said, The industry has been planning to set up capital guarantee products for quite some time now, and this is an outcome of that. However, the committee members have not yet met, so we are yet to decide on the model.