Who Should Invest in Commodity Mutual Funds?
1. Investors who want to Stay Associated with the Commodity Market: Trading in commodities is complex as it involves a high degree of market research on the underlying commodity and the market trend, as well as time to educate oneself. Those who do not have the time to learn such skills might use commodities funds, which are normally run by competent fund managers and experts.
2. Investors who do not Expect Fixed Returns: These funds do not guarantee fixed returns in any specific way by the fund managers or AMC; therefore, the returns generated might vary. For this reason, commodities mutual funds are inappropriate for those investors who are looking for assured appreciation of an investment or fixed returns from their portfolio.
3. Investors having High-Risk Appetite: Commodity mutual funds are a wise investment option only for those investors who do not mind taking risks, do not have a set time frame in mind for receiving optimal returns, and can stay invested for a longer time horizon.
4. Invetsors who want to Diversify their Portfolio: These investments are appropriate for people who have a substantial amount of cash, want to diversify their portfolio, and want to add another class of asset to their holdings.
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