Closed Commodity Funds

Commodity speculation – closed commodity funds as alternative raw materials such as oil, precious metals, industrial metals and also agricultural output products have delivered a strong performance in the past decade. This is hardly surprising, since global demand due to the rapid economic development of in particular in emerging markets had a latent print on price developments. Also in the long term, the demand trend in the same direction seems to show. The United Nations predict a tripling of the raw material consumption by 2050. However, also commodity prices are short – and medium-term speculative factors, which can lead sometimes to very high price swings in both directions.

The volatility of the market makes use of the often institutional actors on the international trade and futures markets, because a lot of money can be earned with derivative price bets. For the private investor, on the other hand, the direct investments in raw materials or the system of open commodity funds or commodity certificates can become a timing risk. A missed good entry or exit date can consume a significant part of the yield potential. A sensible alternative for private investors to participate in the growth and demand potential of raw materials, reduction of speculative risks represent closed commodity funds. Oil and gas funds, agricultural funds, forest fund and precious metal funds invest only rarely directly in commodities, so not speculate by buying, storage and sale on its short-term performance.

Instead, their strategy aimed at the vertical use of the entire value chain. For example, participate in oil and gas Fund oil or gas fields and promote itself according to the raw materials. Agricultural and forest fund in turn purchase farms or forests or growing areas, the respective agricultural commodities to grow and manage. Only gold and silver funds are an exception in this regard, since they invest directly in the metals using quantitative and fiscal effects. The focus of closed commodity funds on long-term generation Timing reduces the influence of the market a real value over several years and price cycles. It is critical to assess closed commodity investments if, as well as a permanent fate of commodity prices at a level takes place, unprofitable would be a decline in their production. In addition, it is sure to verify the individual participation offers like any corporate involvement on their opportunities and risks. Closed commodity investments can however achieve sustainable revenues within a recommended balanced and diversified portfolio of assets, capitalize on the opportunities of commodity price developments and at the same time reduce the Preisvolatilitatsrisiken”, the General representative commented on the AAD Fund discount, Dr. Jurgen Hilp. About the AAD Fund discount GmbH and the AAD Fund discount blog AAD Fund discount GmbH is an independent fund placement firm based in the university town of Marburg. It provides the opportunity, over 9,000 mutual funds investors and virtually all closed-end funds discount conditions usually without to buy a subscription fee. In the AAD Fund discount blog blog.aad fondsdiscount.de the General Manager Dr. Jurgen Hilp picks up on current as well as basic questions about the topics of closed-end funds and investment funds and lit them in economic and legal terms.