Commodity Mutual Funds

If you are interested in commodities than investing in commodity mutual funds can be a good option for you. Especially if you are new to investing and don't want to take too much risk in commodity investing than you can always think about investing in  good commodity mutual funds.

21st Century belongs to the commodities. Last year in 2008, you must have observed how the prices of various commodities had skyrocketed. What could be the reason? As the global economy expands and new countries enter the list of emerging markets, the demand for raw commodities will skyrocket. Supply is finite so this will push the prices of the commodities sky high.

Commodity

There are experts who believe that the secular bull market in the commodites is already underway. Secular bull markets are supposed to last for a few decades. This makes commodity investing something to be not missed by serious investors. Many commodities are traded through futures contracts.

But for new investors trading commodity futures can be risky so the better bet is to invest in commodity funds. Now, you must be knowing this that mutual funds are barred by law to avoid risky investment strategies. So mutual fund investment is considered to be less risky.

How do you find good commodity funds? Use the best resource on mutual funds: MorningStar. Go to the MorningStar website, you will find a lot of useful information about mutual funds, the latest news, informations about fees and expenses and so on. Morningstar has got a five star rating system that is considered to be excellent. So by visiting the MorningStar website, you can make a list of top five commodity mutual funds in the market.

Now make a list of questions like who manages the fund, what is the track record of the fund, what are its fees and expenses, what securities does the fund invest in, what are the investment objectives of the fund, what are the risk involved in investing in that fund and so on. You can get some of this information by reading the funds prospectus. Good news funds love to send their funds prospectus free.

So after making a list of top 5 commodity funds, you can read the funds prospectus and further narrow down the list to make your decisions about the best commodity mutual funds that fit your investment needs and objectives!

Commodity Mutual Funds