The current digital age that we live in has provided endless opportunities for advancement in every field of technology and development. This is also pertinent when it comes to investing. Technology has made it possible to invest instantaneously in any asset that meets your requirements and preferences. That it must meet your financial objectives and take into consideration your risk tolerance goes without saying. Today, you can invest in just about anything, from hot stocks to the rice you eat thanks to the commodity market. Earlier, commodity mutual funds were not very popular in India. Investors have, however, recently begun to exhibit interest in the commodities’ market due to the shift in focus on derivatives.
Fundamentals of Commodity Funds
A commodity mutual fund invests largely in commodities and pays investors based on how well the market for the commodities performs. Similar to how equity funds are tied to underlying equities assets, commodity funds are related to underlying assets that are commodities, such as the market price of crude oil, gold, other metals, etc. In this sense, the term ‘commodity’ refers to traded goods such as food grains, oil, gold, etc. For more than a thousand years, commerce and business have shaped our lives in significant ways with commodities serving as the foundation for trade. Even though a majority of people do not actively engage in commodities trading, we are all indirectly connected. Investors have a great opportunity to participate in commodity trading while also achieving certain financial goals through such funds.
Commodity Funds in India
Esta historia es de la edición January 30, 2023 de Dalal Street Investment Journal.
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