Global economy is always linked through various commodities. This article will look into best commodities broad basket mutual funds. The funds include PIMCO Commodity Real Return Strategy A, DWS Enhanced Commodity Strategy A, Goldman Sachs Commodity Strategy A, and more.
Investing in commodities has received a lot of attention from investor and media (newspaper, internet, and TV). The price of gold, silver, oil, diamond, corn, soy, sugar, cotton, livestock, coffee, cocoa, and hogs are in the news every day. To invest in the commodities markets, it may take a very sophisticated endeavor. One of the easiest ways is using commodity mutual funds. These commodity mutual funds provide an opportunity for almost any investor to get a piece of the action.
There are several types of commodity mutual funds such as: true commodity funds, commodities funds that hold futures, natural resource funds, and combination funds. Other ways to invest in commodity is using exchange traded funds (ETFs), and exchange traded notes (ETNs).
Top Commodities Broad Basket Mutual Funds
Most of these commodities broad basket mutual funds are also rated among the best mutual funds by various financial websites such as Morningstar, US News, Smart Money, etc. Please check details about its sales load, initial investment requirement, performance, risk, top holdings, turnover rate, yield, expense ratio, etc.
The 7 Best Ranked Commodities Broad Basket Mutual Funds of 2012 are:
- PIMCO Commodity Real Return Strategy A (PCRAX)
- DWS Enhanced Commodity Strategy A (SKNRX)
- Goldman Sachs Commodity Strategy A (GSCAX)
- Credit Suisse Commodity Return Strategy A (CRSAX)
- Oppenheimer Commodity Strategy Total Return A (QRAAX)
- Invesco Commodities Strategy A (COAAX)
- Rydex Commodities Strategy A (RYMEX)
Note: Some of these funds don’t have a long term track record (i.e. >5 years) since they are still relatively new. These commodities mutual funds are more volatile than typical diversified stock mutual funds.
|PIMCO Commodity Real Ret Strat|
The PIMCO Commodity Real Return Strategy mutual fund objective is to provide maximum real return, consistent with prudent investment management. This commodities mutual fund uses its asset to buy commodity-linked derivative instruments supported by a portfolio of inflation-indexed securities and other bond Instruments. It seeks to get exposure to the commodity markets mainly through investments in leveraged or unleveraged commodity index-linked notes. It may invest in preferred stocks.
This mutual fund has 4-stars rating from Morningstar. The total net assets are $22.21 billion. This top performer mutual fund has high dividend yield of 28.32%. The annual expense ratio is 1.24%. Mihir Worah has been managing this fund since December 2007. Other classes of this fund include: Class A with load waived (PCRAX.LW), Class B (PCRBX), Class C (PCRCX), Class D (PCRDX), Class P (PCRPX), Class R (PCSRX), Admin Class (PCRRX), and Institutional Class (PCRIX).
The effective duration of this best ranked mutual fund is 5.35 years and the effective maturity is 7.14 years. The 5-year annualized return is 2.95%. The benchmark of this fund is DJ UBS Commodity Index and Lipper Commodities General Funds Average.
The top market value weighted as of December 2011 is Energy (34%), Grains (19%), Precious Metals (16%) and Industrial Metals (15%).
If you don't like the sales load, you can also invest in Harbor Commodity Real Return Strategy (HACMX). This commodities broad basket mutual fund is also managed by Mihir Worah.
2. DWS Enhanced Commodity Strategy A (SKNRX)
|DWS Enhanced Commodity Strategy|
This commodities broad basket mutual fund is currently managed by William Chepolis, Darwei Kung, John D. Ryan and Eric S. Meyer. This mutual fund has total net assets of $1.04 billion. The minimum initial investment is $1.000 for brokerage account and $500 for tax deferred account (IRA account). The annual expense ratio is 1.50%.
The top sectors of the portfolio composition are U.S. Treasury notes and bills (31%), Corporate Bonds (28%), foreign agency and supranationals (10%), U.S. government/agency (6%), and Mortgage-backed securities (6%).
3. Goldman Sachs Commodity Strategy A (GSCAX)
The Goldman Sachs Commodity Strategy fund uses its assets to purchase commodity-linked notes that seek the performance returns of the S&P GSCI Commodity Index or other similar indices. It may enhance cash strategies that capitalize on global fixed income expertise.
Top Performer Broad Basket Commodities Mutual Funds 2011
The investors of this commodities mutual fund get a 12-month dividend yield of 2.07%. For regular brokerage account, investors need to make initial purchase of $1.000. Morningstar has rated this top performer fund with 2-stars rating. It has an annual expense ratio of 0.92%. This top mutual fund is available for purchase from a list of 66 brokerages. The fund’s 5-year annualized return is 11.42%. The benchmark of this fund is S&P GSCI Commodity Index.
The top commodities allocations are Energy Components (70.5%), Agricultural (14.7%), Industrial Metals (6.6%), Livestock (4.7%) and Precious Metals (3.5%).
4. Credit Suisse Commodity Return Strategy A (CRSAX)
|Credit Suisse Commodity Return Strat|
This top performing commodities mutual fund has total net assets of $5.57 billion. Christopher Burton is the current lead fund manager. The annual holdings turnover of this fund as of February 17, 2012 is 165%. The maximum sales charge of this fund is 3.0%. The dividends are paid quarterly. The other classes of this fund are Class C (CRSCX) and Institutional Class (CRSOX). The redemption fee is 2.0%.
The top weightings are Energy (33.9%), Grains (22.2%), Precious Metals (16.1%), Industrial Metals (14.9%), Softs (6.6%) and Livestock (6.3%).
5. Oppenheimer Commodity Strategy Total Return A (QRAAX)
The Oppenheimer Commodity Strategy Total Return fund objective is to achieve total return. This best commodities mutual fund mainly invests in commodity-linked derivatives, investment-grade and non-investment-grade corporate bonds and notes. This Oppenheimer fund was first introduced to public in 1997.
Since its inception, this fund has recorded 9 years of positive return and 5-years of negative return. The best 1-year total return was occurred in 2000 with 44.44%. The YTD return is 1.80%. This fund has a 10-year annualized return of 3.95%. The fund has total net assets of $1.19 billion. The fund has dividend yield of 6.22%. The most recent distribution was in December 2011 ($0.21). The CUSIP of this fund is 68380Y102.
6. Invesco Commodities Strategy A (COAAX)
Invesco Commodities Strategy fund has a yield of 5.57%. It also has a sales load of 5.5%. The total net assets are $82 million. This commodities mutual fund is limited to new investor.
7. Rydex Commodities Strategy A (RYMEX)
The Rydex Commodities Strategy fund has an expense ratio of 1.55%. The minimum initial investment is $2,500. This fund is rated with 1 star rating by Morningstar.
Disclosure: No Position
|No||Name||Ticker||1 Year Return %||3 Year Return %||5 Year Return %||10 Year Return %||Expense Ratio|
|1||PIMCO Commodity Real Ret Strat A||PCRAX||-5.51%||19.36%||2.95%||-||1.19%|
|2||DWS Enhanced Commodity Strategy A||SKNRX||-8.23%||13.93%||0.66%||-||1.50%|
|3||Goldman Sachs Commodity Strategy A||GSCAX||-2.72%||11.42%||-||-||0.97%|
|4||Credit Suisse Commodity Return Strat A||CRSAX||-11.54%||9.68%||-1.57%||-||1.05%|
|5||Oppenheimer Commodity Strat Total Ret A||QRAAX||-3.81%||9.31%||-6.44%||3.95%||1.46%|
|6||Invesco Commodities Strategy A||COAAX||-10.47%||8.92%||-||-||1.21%|
|7||Rydex Commodities Strategy A||RYMEX||-4.18%||7.53%||-4.08%||-||1.56%|