A Natural Resource and New Energy Fund is an investment vehicle owned by the government body where the sole source of revenue is derived from minerals, gas or oil. The main objective of a Natural Resource Fund is saving for future generations, sterilization of capital inflows and covering budget deficits. There is also a provision of investment in foreign assets related to finance.
These funds also assist the government in the management of mineral, oil and gas revenues. So before investing in a Natural Resources and New Energy Fund, you should consider certain parameters that will help and assist you in the long run.
- Performance and ranking
You should always keep in mind that you need to select a mutual fund that not only provides you with the best returns but also suits your risk profile. Investors are generally lured by the recent performance of a mutual fund but one should consider various other parameters before finalizing a fund portfolio.
In order to figure out a Natural Resource fund and New Energy Fund fund's ranking, you are required to check the quarterly ranking of the fund and its peers. Select a scheme that has remained uppermost in terms of the ranking (in quarterly).
- Return ratios
Measuring the risk and return ratio should be your primary focus along with the knowledge of how much a fund manager has been able to generate out of a portfolio.
- Expense ratio
A high expense ratio affects the fund’s returns; therefore, this is one of the most important parameters in order to select the perfect Natural Resource Fund and New Energy Fund Scheme.
- The experience and tenure of the fund manager
A fund manager is the one who takes the ultimate decisions; therefore, his experience plays a very important role in the fund’s performance. His/her past track record determines whether you should avail his/her services or not. Also, keep a check over his quarterly performance.
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