Commodities are tangible goods that are either naturally occurring or can be agriculturally grown. Commodities
are consumed directly or used as raw materials for manufacturing finished goods meant for public consumption
such as agricultural products such as grains, tea, coffee, livestock, oil, metals and natural gas.
Why should you invest in the commodities market?
Commodities play an important role in the development process and hence are building blocks of every
• To diversify your portfolio
• To provide a hedge against inflation
• To improve potential returns
Ways to invest in commodities:
• Investing directly in the commodity.
• Using commodity futures contracts to invest.
• Buying shares of exchange-traded funds that specialize in commodities (Commodity ETFs).
• Buying shares of stock in companies that produce commodities (Commodity Stocks).
• Through the exchange-traded commodities derivatives (ETCD) route. Investors can participate in
commodity markets in a structured manner through professionally managed mutual funds