Is there any mutual fund that invests in commodities? I believe since commodities are cheap right now, this should be a good time to invest in them.
- Anil Mittal
There are several mutual funds that invest in Indian and global commodities. However, we do not recommend thematic schemes, including commodities, to investors. This is many because these businesses are cyclical in nature. They fall in and out of favour during different phases in the economy. An investor should have an intimate knowledge about a particular sector to take call on its current status, likely price movements, etc and plan the entry and exit from these schemes to make money. Most regular investors would find it very difficult to do this.
Average investors shouldn't bother about investing in a thematic scheme to benefit from an upside in a particular sector. Their investments in a diversified equity scheme would capture some of the gains as the hot sector would mostly figure in the portfolio of the scheme.
This article was originally published on January 15, 2016.
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