What are Commodity Mutual Funds?
Commodity Mutual Funds are described as a type of fund that primarily invests in commodities and offers returns to investors based on the market performance of the commodity chosen by the AMC or fund manager. Commodity funds are those funds that invest in pure raw materials or primary agricultural products, known as commodities. These funds invest in precious metals like gold and silver, energy resources such as oil, natural gas, etc., and agricultural goods like rice, sugarcane, etc. Basically, there are two types of commodities that are traded, Agricultural Commodities and Non-Agricultural Commodities. Commodity funds also invest in the companies that are engaged in the production of these commodities; along with this, these funds also invest in commodity futures and options, and some commodity funds also invest in the stocks of companies, like gold funds, which invest in the stocks of companies engaged in gold mining. Some of the examples of commodity mutual funds are:
- AXIS Gold Fund
- LIC MF Gold ETF FoF
- ICICI Prudential Commodities Fund
- Tata Resources and Energy Fund Growth
- DSP Natural Resources and New Energy Fund – Growth
Table of Content
- Features of Commodity Mutual Funds
- Types of Commodity Mutual Funds
- Who Should Invest in Commodity Mutual Funds?
- Advantages of Commodity Mutual Funds
- Disadvantages of Commodity Mutual Funds
- Risks Associated with Commodity Mutual Funds