The first ‘Quant Fund’ launched in India has received a fair amount of response, prompting several others to follow suit. The portfolio of a ‘quant fund’ is based on computer-based quantitative analysis working on a mathematical model, with no human judgement involved. Lotus India Mutual Fund’s ‘Lotus India Agile Fund’ which was launched in November last year as India’s first quant fund, currently manages Rs 230 crore on behalf of around 40,000 investors. “The Agile Fund is our largest equity fund today. Though the NAV has come down due to the correction in the market, the investor’s interest in the fund is intact,” said Rajesh Vijay Shastri , Head of Business Development and Strategic Initiative, Lotus India Mutual Fund.   more »

India is mulling imposing a blanket ban on trading in futures in food commodities, as the government attempts to control surging price inflation. The move has been proposed by India's finance minister Palaniappan Chidambaram who told delegates at the Asian Development Bank's meeting in Madrid yesterday that the country is "facing a very grave crisis on the food front", the Financial Times reports. India already forbids futures trading in wheat and rice, having introduced the move in response to worries over the part hedge funds and financial market traders have played in the recent rises recorded by commodities. Cameron Brandt, global markets analyst at EPFR told Marketwatch: "It's indicative of the fact that there's a real issue here and governments are scrambling to find some kind of solution.   more »

In recent months, hedge funds, pension funds and other group investment vehicles, which strive for maximum return in minimum time, have turned the commodity market upside down. These funds of the rich and famous, facing difficulty in the stock market lately, turned their attention to the commodity market. Instead of trading in blue chips and other stocks they began trading in commodity futures -- setting off the current steep rise in commodity prices. Hedge funds and others have gained piles of cash from Middle Eastern oil-producing nations in the last three years. The price rises over the past year of all commodities including food grains are a testament to this manipulation. Minor climatic events in Australia and elsewhere have cut into food grain production, but these have been balanced by huge increases in the overall production of wheat, coarse grains, pulses and rice in India and elsewhere. India's total grain output this year is expected to be 227 million tons, compared to 214 million tons last year. This huge jump is sufficient to offset any losses in Australia and elsewhere. It is expected that in 2008 the global wheat crop will yield 646 million tons of wheat, a record and about 45 million tons higher than last year. Hence world consumers may well ask: Where is the shortage, and why these dramatic price rises?   more »