MUMBAI (Commodity Online): The global commodities markets seemed buoyant and with investors being keen on parking their funds in safer instruments, financial services providers have started offering Commodity-focused mutual funds.
In order to diversify the portfolio and reduce the risk levels, the investors are seen taking refuge to the Mutual Funds that invest in diversified commodities.
Last week, when the US Federal Reserve announced to purchase USD 600 billion government treasuries, the market sentiment turned buoyant and commodities prices started scaling up on hopes of improved economic scenario pushing up the overall consumption, be it energy commodities, bullions or the agro commodities.
The Fed’s move has helped a weaker dollar and high demand from emerging markets such as India and China. The sustained weakness in dollar has made commodities as most preferred investment destination for the investors.
Copper prices jumped to the 27-month peak and hovered at the higher levels during past several trading sessions.
The bullion metals, including gold and silver are inching towards their life time high prices. While gold has crossed USD 1300 per ounce, the silver prices are inching towards USD 30 per ounce amid heavy bullish sentiments in the international markets.
Fund houses such as Mirae Asset Management, Birla Sun Life Asset Management and ING Investment Management offer globally-focused commodity funds, with different investment themes.
Crude prices too turned volatile with heavy upheavals seen in the energy sector. The international brent crude is reading at USD 88.81 per barrel today.
A report from Mydigitalfc quoted Cambridge, Massachusetts-based EPFR Global report as saying that investors have pumped in USD 19 billion into commodity funds so far this year, more than three times the amount committed to second place real estate sector funds.
The China-factor is yet another factor to boost commodity prices. China and India, which is planning to boost its infrastructure, are on a consumption spree pushing up commodity prices.
Although the equities markets have regained their pre-recession levels in India, the mood is not so upbeat among the small investors.
Most investors have preferred mutual fund investments in the turmoil. However, looking at the commodity-focused mutual funds, the rate of return on investments and the security of the funds are two advantages that make investors more interested towards it.
