Can we have Portfolio Management services for commodities?
Many portfolio managers are available to take care of our investment in Stock markets. I have not seen any portfolio manager for commodities market.
Why no portfolio manager for commodities markets?
First analyse why we have portfolio managers for stocks and shares.
Portfolio managers have the qualification and experiance to guide your investments. Business of a company can be studied, trends can be studied.
But it is possible to forecast the commodities prices. A bad monsoon can ruin the contract in hands.
Portfolio managers invest for long terms, its not possible to excute a transaction for long term in commodities market.
Above all these, Commodity markets regulator has not approved the portfolio management services for commodities.
In 2011, a amended bill was tabled for approval but no progress noticed on approval of the bill.
Here are some of the opinions of invetors on whether it should be allowed or not:
"Portfolio management services should be allowed only for those commodities whose prices are driven solely by the international markets. This will help avert the risk of prices being driven by large market players.
In India, the prices of globally traded commodities, such as bullion, base metals and energy, mirror the international market prices and are not driven by the Indian demand-supply fundamentals. Hence, PMS in these commodities will not be risky.
However, the reverse may happen in the case of commodities that derive their prices from domestic fundamentals. For instance, PMS in agricultural commodities may cause an upheaval. Inflation in agricultural commodities is a sensitive issue and, hence, the related segments involve massive government intervention." You can read this full statement here.
The average rate of return is never guaranteed. Markets fluctuate. There are many different factors to return. Your risk tolerance is a large factor.
Mr. Dhaka you dont have to spam the board by writing address of your website. Speak what you have to say but dont spam here.