Jump to content
House Price Crash Forum

Commodities Funds


Recommended Posts

0
HOLA441
1
HOLA442
2
HOLA443

I have been looking at a covered warrant called G800 which tracks an index based on a basket of commodities ranging from coffee and sugar to gold.

It does this by buying them and selling them on the futures market on a rolling basis. So that your fund is always buying coffee for delivery in 3 months time and then selling it for delivery in 2 months time. (Otherwise a dumper truck would end up outside your door!)

It sounds straightforward in principle and it means that you get exposure to the price of the commodities themselves without the intermediary of a company that might be badly managed etc.

However in fact G800 is one of these risky derivatives that everyone says should be avoided. I am tempted to buy some G800 but I am trying to clarify the nature of the risk, as I see it there are 3 possibilities:

1) It is risky because the price of cofee, sugar, silver and gold might go down

Conclusion - I would buy it because I think that these things will more than hold their value in the current climate

2) It is risky because these derivatives are not liquid (meaning that they are not bought and sold that often and there may be no buyer when you want to sell)

Conclusion - I would buy only if I wanted to hold for the long term

3) It is risky because for reasons we dont understand this whole derivatives market is dodgy and prone to all sorts of problems from software meltdowns to financial shenanigins (sp)

Conclusion - don't touch G800 with a bargepole

++Does M & G global basics also invest in G800 as part of its portfolio?

++Has anybody else heard of G800?

Link to comment
Share on other sites

3
HOLA444

Just wondered if anyone had tried or has any knowledge of any general comodities funds, something that invests into a reasonable range of companies involved in a spread of commodities?

First State Global Reources has been good to me this year. They have exposure to gold, energy, minerals and low fees. Worth considering although there could be a signficant downside if copper etc had a pull back.

Link to comment
Share on other sites

4
HOLA445

M & G Global Basics Top 10 Holdings

Rio Tinto Ltd Industrial Materials AU 4.1%

Peabody Energy Energy US 3.7%

Consol Energy Energy US 3.7%

P & O Business Services GB 3.4%

TOTAL Energy FR 3.3%

Tullow Oil Energy GB 2.8%

Falconbridge Industrial Materials CA 2.7%

BHP Billiton Ltd Industrial Materials AU 2.7%

Imerys Industrial Materials FR 2.7%

Coles Myer Ltd Consumer Services AU 2.7%

The website says holdings are 95% stocks, 4% cash 1% other.

Edited by urban_hymn
Link to comment
Share on other sites

5
HOLA446
6
HOLA447
7
HOLA448

Merrill Lynch also run a commodities fund. Have you considered directly investing in natural resources firms? May make sense because that will give more control over where your money will be invested and you won't have to pay a management charge.

If you buy through a fund supermarket like Fidelity the annual management charge is only 1.5%. If you've picked the right sector this will barely make an impression on your gains.

Link to comment
Share on other sites

8
HOLA449

If you buy through a fund supermarket like Fidelity the annual management charge is only 1.5%. If you've picked the right sector this will barely make an impression on your gains.

I have my ISA through Fidelity. I called them about 6 months ago because I was seriously considering dumping a fairly considerable amount of money into a commodities fund.

After getting through to the usual call center in India, speaking to someone who could barely speak english, and trying to explain what constituted a commodities fund, I gave up.

They suggested Technology, or Telecoms. I disctinctly wanted a commodities fund, I try explaining mining companies, no luck. I asked if there was someone I could talk to, and they offered to send me marketing brochures.

Initally I was quite interested in Fidelity, mainly because of the Peter Lynch connection (read one of his books before touching the stock market)

Currently I am looking to move my ISA elsewhere.

If anyone has some good ideas on commodity funds I'd be interested.

Edited by BandWagon
Link to comment
Share on other sites

9
HOLA4410

After getting through to the usual call center in India, speaking to someone who could barely speak english, and trying to explain what constituted a commodities fund, I gave up.

You don't need to speak to anyone that's the beauty of online trading.

They have a funds search engine on their website into which you can enter search terms such as "commodities". You can then view how the fund is rated by various agencies such as S&P and view historical performance. It's a breeze.

The golden rule is - if your investment falls more than you are comfortable with sell it promptly. Shit happens sometimes! Live to invest another day.

Link to comment
Share on other sites

10
HOLA4411

You don't need to speak to anyone that's the beauty of online trading.

They have a funds search engine on their website into which you can enter search terms such as "commodities". You can then view how the fund is rated by various agencies such as S&P and view historical performance. It's a breeze.

The golden rule is - if your investment falls more than you are comfortable with sell it promptly. Shit happens sometimes! Live to invest another day.

Well maybe you know something about Fidelity that I don't.

When I enter "commodities" or "mining" into their fund search, I just get the message "Results: 0 funds"

Not very helpful.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information