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The Best Commodities Mutual Funds


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Searching For the Best Commodities Mutual Funds

best commodities mutual fundsYou need the best commodities mutual funds primarily when you are worried about inflation. Commodities are usually popular investments, but they are particularly popular when investors are worried about inflation. Commodities such as precious metals and energy sources generally rise in price in response to inflation. They also increase in value for other reasons, but their ability to keep up with inflation makes them very attractive. Often, even stocks that perform well do not keep up with inflation and so the investor ends up seeing a loss of real value in his portfolio’s stocks.

When you buy into a commodities mutual fund, you are not buying a single commodity, such as oil or wheat. Instead, you are buying into an index fund that has invested in several different commodities around the world. Each mutual fund will have its own particular selection of commodities, which you can review before investing. Some of the best commodities mutual funds try to spread out their investments evenly, while others may have a focus on one or more commodities.

How to Find the Best Commodities Mutual Funds

In order to find the best commodities mutual funds for your portfolio, you need to review just how the fund invests its money. Precious metals have become very popular recently and many of these funds have increased their investment in companies that mine and explore for gold, copper and other such metals. Certain funds have also increased their holdings in oil and other energy sources due to the rising prices of energy.

However, you should not overlook the other commodities, since they all respond well to inflation. Food prices are climbing because the value of commodities such as wheat and corn has risen significantly. The best commodities mutual funds incorporate these other commodities into their index in order to avoid missing out when one sector of the commodities market outperforms the others.

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