Commodity Mutual Funds Worth It?

Reflecting on your cover story from the previous edition on commodity mutual funds, my personal take is that they are a slow wealth generator. But are they worth considering in my portfolio? - Sagar Shah 

Editor Responds : Thank you for writing to us. To answer you in brief, commodity mutual funds can be worth considering for certain investors, depending on their investment goals, risk tolerance, and understanding of commodity markets. They provide diversification benefits to a portfolio because they invest in a variety of commodities such as precious metals (gold, silver), energy (oil, natural gas), agricultural products (corn, wheat), and more. 

Precious metals like gold, are often seen as a hedge against inflation. During periods of rising inflation, commodity prices may increase, potentially offsetting losses in other parts of the portfolio. However, as an investor, you should carefully evaluate the risks and potential benefits, consider their investment objectives, and consult with a financial advisor, if needed before making investment decisions.