Investing in commodities can offer an attractive return over a relatively short period of time, but it is also more risky. One way to reduce risk is to invest in broad commodity basket funds. These funds invest in a diversified basket of commodities, including grains, minerals, metals, livestock, etc. Additionally, these funds invest in commodities either directly or through commodity-linked derivatives. Let’s take a look at the 10 best performing broad commodity basket funds.
10 Best Performing Broad Commodity Basket Funds
We used one-year performance data for broad-based commodity funds (from money.usnews.com) to come up with the 10 best performing broad-based commodity funds.
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Credit Suisse Trust Commodity Ret St Pt (CCRSX, 25%)
Credit Suisse Trust Commodity Return Strategy Portfolio (MUTF:CCRSX) invests primarily in a combination of commodity-related derivatives and fixed income securities. It has gained more than 18% in the past six months and almost 15% in the past three years. CCRSX has over $600 million in total assets and an expense ratio of 1.05. The two main holdings of the fund are: Credit Suisse Trust Cayman Com and United States Treasury Notes 1.09685%.
Vanguard Commodity Strategy Fund (VCMDX, 26%)
Vanguard Commodity Strategy Fund Admiral Shares (MUTF:VCMDX) invests primarily in commodity-related investments. It has gained nearly 16% over the past six months and more than 19% over the past three years. VCMDX has over $2.20 billion in total assets and an expense ratio of 0.20. This fund has invested heavily in US Treasuries.
PGIM Quant Solutions Commodity Strats Fd (PQCMX, 26%)
PGIM Quant Solutions Commodity Strategies Fund (MUTF:PQCMX) aims to generate returns in excess of the Bloomberg Commodity Index by investing in exchange-traded futures and exchange-traded futures. It has gained nearly 22% over the past six months and nearly 17% over the past three years. PQCMX has over $76 million in total assets and an expense ratio of 0.56. The two top holdings in the fund are: US Treasury Bills 1.13409% and US Treasury Bills 0.06755%.
DoubleLine Strategic Commodities Fund (DBCMX, 26%)
DoubleLine Strategic Commodity Fund (MUTF:DBCMX) generally invests in derivative contracts relating to commodities, securities or other instruments. It has gained nearly 19% over the past six months and more than 14% over the past three years. DBCMX has over $200 million in total assets and an expense ratio of 1.11. The two main holdings of the fund are: United States Treasury Bills 0% and Doubleline Strategic Commodity Ltd.
Columbia Commodity Strategy Fund (CCSAX, 27%)
Columbia Commodity Strategy Fund (MUTF:CCSAX) invests in commodity futures, structured notes and/or swaps. It has gained more than 19% over the past six months and nearly 17% over the past three years. CCSAX has over $370 million in total assets and an expense ratio of 1.13. The fund’s top three holdings are: Columbia Short-Term Cash, Gold Future Dec 22 and Natural Gas Jan 23.
AQR Risk-Balanced Commodities Strat Fund (ARCIX, 27%)
AQR Risk-Balanced Commodities Strategy Fund (MUTF:ARCIX) invests in various sectors of commodities, fixed income securities and money market instruments. It has gained more than 17% in the last six months and more than 25% in the last three years. ARCIX has over $500 million in total assets and an expense ratio of 1.02. The two main holdings of the fund are: Limited Use Cash Investment and Ubs Relationship Fds.
Goldman Sachs Commodity Strategy Fund (GSCAX, 29%)
Goldman Sachs Commodity Strategy Fund (MUTF:GSCAX) invests in commodity markets by investing in a wholly owned subsidiary of the fund organized as a company governed by the laws of the Cayman Islands, Cayman Commodity-CSF, Ltd. It has gained nearly 21% over the past six months and more than 8% over the past three years. GSCAX has over $950 million in total assets and an expense ratio of 0.93. The two top holdings in the fund are: US Treasury Bills 0.01 and Cayman Commodity Csf, Ltd.
Catalyst/Millburn Dynamic Cmdty Stgy Fd (DCXAX, 33%)
Catalyst/Millburn Dynamic Commodity Strategy Fund (MUTF:DCXAX) invests in commodity futures, options on futures and common stock futures. It has gained more than 25% in the last six months and more than 5% in the last three years. DCXAX has over $23 million in total assets and an expense ratio of 2.33. The three main holdings of the fund are: Chcsf Fund Ltd, First American Government Obligs U and Utilities Select Sector SPDR® ETF.
PIMCO CommoditiesPLUS® Strategic Fund (PCLAX, 38%)
PIMCO CommoditiesPLUS® Strategy Fund (MUTF:PCLAX) normally invests in commodity-related derivative instruments. It has gained nearly 27% over the past six months and nearly 20% over the past three years. PCLAX has over $3.80 billion in total assets and an expense ratio of 1.19. The fund’s three main holdings are: Pimco Cayman Commodity Fund Iii Ltd, Pimco Fds and Federal National Mortgage Association 4%.
Rydex Commodities Strategy Fund (RYMEX, 42%)
Rydex Commodities Fund (MUTF:RYMEX) aims to deliver investment results in line with the performance of the S&P GSCI® Commodity Index. It has gained over 34% over the past six months and over 13.25% over the past three years. RYMEX has over $16 million in total assets and an expense ratio of 1.66. The fund’s three main holdings are: Federal Home Loan Banks, Federal Home Loan Banks 0.13%, Federal Home Loan Banks 0.27%.
Stagflation is a nasty mix of low economic growth punctuated by high unemployment. And at the root of it all is inflation. For a long time, many economists believed that stagflation was not possible. However, the 1970s changed this way of thinking. Not only were American consumers facing high inflation, but they were also facing high unemployment.
And according to some analysts, history may be about to repeat itself. As economists seem divided on the likelihood of a recession, there are growing fears that the United States is entering a period of stagflation. In an effort to fight inflation, the Federal Reserve is committed to aggressively raising interest rates. There are already signs of slowing economic growth and falling demand. The next shoe to fall could come from employment numbers.
This means that investors should turn their attention to stocks that have the attributes to fight stagflation. This includes companies that have the potential to generate high free cash flow. One reason is that healthy cash flow can be applied to reward shareholders with a dividend. And it can increase the total return. Here are seven stocks that can help investors do just that.
Check out “7 Stagflation Stocks to Help You Navigate Low Growth Periods”.