On 4th May, (DSP BlackRock brings its foreign funds to India), we had written on DSP BlackRock filing an offer document with the Securities and Exchange Board of India (SEBI) to launch three global funds—DSP BlackRock Latin American Fund, DSP BlackRock World Agriculture Fund and DSP BlackRock New Energy Fund. All three were open-ended fund of funds (FoF) schemes investing in international BlackRock funds.
Now, DSP BlackRock Mutual Fund has filed another offer document with SEBI to launch one more global fund—the DSP BlackRock Emerging Europe Fund. It's an open-ended FoF scheme, again investing in BlackRock's international funds.
Moneylife has been wondering whether funds that put your money in other countries offer another round of diversification. Another issue with these funds that bet on global markets is that it is hard to find the details of where exactly your money is being invested.
We had mentioned earlier that Indians have not been keen to channel their savings into domestic mutual funds—for a variety of reasons—despite the excellent performance of many schemes over the past decade. So, it comes as a surprise that fund companies think Indian savers would be keen to invest in funds for overseas markets. The number of fund houses that have planned to raise money from Indians, to invest in overseas securities, is actually turning into a torrent.
DSP BlackRock Emerging Europe Fund plans to invest in units of BlackRock Global Funds-Emerging Europe Fund (BGF-EEF). It has given a return of just 4.3% over the past five years and 17.9% since its inception (1 September 1998).
BlackRock Global Funds-Emerging Europe Fund invests in sector such as financials, energy, telecom services, materials and consumer stables, among other sectors. The fund is also benchmarked to MSCI EM Europe 10/40 (net). The benchmark has given a return of 5.6% over the past five years and 15.8% since inception, while the Sensex and the Nifty have returned 12% CAGR (compounded annual growth rate) over the past five years. Again, both these indices have returned 16% (CAGR) since 1 September 1998.
The top five holdings of BlackRock Global Europe fund are OAO Gazprom, Sberbank, Bk Pekao, Lukoil and OTP Bank.
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'I made my money by selling too soon.'
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