Oil, Gas & Coal Diversified Commodity

Oil, gas and coal commodity based ETFs and mutual Funds invest the... Oil, gas and coal commodity based ETFs and mutual Funds invest the majority of their assets in a mix of energy resources. For example, a fund may own both crude oil and natural gas futures. These funds tend to be passively managed. They can also own futures contracts. Investors are attracted to these funds because they offer exposure to multiple energy resources at the same time. Energy commodities can outperform in times of economic growth, and can help investors maintain their purchasing power in times of inflation. The advantage of owning more than one energy commodity at the same time is that an investor doesn’t have all their eggs in one basket. There can be times when oil outperforms natural gas, for example, and vice versa. Having said this, energy commodities do tend to move together, in general. As a result, while these funds may be somewhat diversified, they are still a bet on energy as a sector. Accordingly, these may be appropriate for investors willing to take on considerable volatility in search of higher returns. Last Updated: 11/26/2024 View more View less

Oil, gas and coal commodity based ETFs and mutual Funds invest the majority of their assets in a mix of energy resources. For example, a fund may own both crude oil and natural... Oil, gas and coal commodity based ETFs and mutual Funds invest the majority of their assets in a mix of energy resources. For example, a fund may own both crude oil and natural gas futures. These funds tend to be passively managed. They can also own futures contracts. Investors are attracted to these funds because they offer exposure to multiple energy resources at the same time. Energy commodities can outperform in times of economic growth, and can help investors maintain their purchasing power in times of inflation. The advantage of owning more than one energy commodity at the same time is that an investor doesn’t have all their eggs in one basket. There can be times when oil outperforms natural gas, for example, and vice versa. Having said this, energy commodities do tend to move together, in general. As a result, while these funds may be somewhat diversified, they are still a bet on energy as a sector. Accordingly, these may be appropriate for investors willing to take on considerable volatility in search of higher returns. Last Updated: 11/26/2024 View more View less