Presentation of commodity funds

Commodity funds provide investors with access to the world of commodity exchanges and commodity market instruments, allowing them to benefit from the price movements of futures and other instruments on key commodities and other commodity products, as well as the shares of companies in related sectors.

Global commodity markets mainly trade in energy, metals and agricultural products. The best known are crude oil and natural gas for energy, gold and silver for precious metals, copper and aluminium for industrial metals, and wheat, corn and soybeans for agricultural products. In addition, carbon emission trading and alternative energy sources such as uranium, hydrogen and solar energy are also gaining attention.

Commodities are a risky investment, with sudden rises in price often followed by sudden falls due to natural, economic or political events. For this reason, commodity funds are recommended for a longer holding period of 5–7 years. Commodity funds can also play an important complementary role in well-diversified client portfolios, as their price movements are generally not correlated with those of other asset classes, such as traditional bond and equity funds. They can also provide increased protection against inflationary shocks and geopolitical risks, based on past experience.

Features of equity funds

• indirect investment opportunities in commodities, raw materials
• riskiness
• volatile exchange rate
• price movements independent of other securities