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Commodities Broad Basket

Looking forward do commodities broad basket etf's or funds make sense for a small (5%) portion of ones portfolio? Considering EAPCX or SKIRX.


  • edited August 2016
    Hi @Bobpa,

    I have dabbled in commodity funds (PCRAX & JCRAX) in the past ... and, I have made money in both of them. Over the past five years I would have lost money if I had stayed invested in them. I, like you, have been thinking of reestablishing a position in a commodity fund (JCRAX) in my specialty/theme sleeve held in the growth area of my portfolio. However, I am thinking the better time to do this would be in a market pullback rather than now since the markets are at, or towards, all time highs even though commodities might not be but their producers have had a nice upward run with the markets. JCRAX holds a good number of producers while PCRAX trades more in commodity paper. With this, I am looking more towards JCRAX since part of the fund holds producers plus it can also trade in commodity paper (contracts).

    It is interesting that you bring this up.

    Now, I wonder if the talking heads start to talk commodities?
  • TedTed
    edited August 2016
    Bobpa: Look at BCSAX, or BRCAX, but be careful !
  • edited August 2016

    This is a good way to start an argument. Similar to holding gold, there's no simple cut & dry answer, but the question is likely to provoke strong feelings.

    As one who has routinely maintained a 5-7% stake in what I consider real assets for a couple decades, the only thing I can say definitively is that they tend to run hot and cold, helping returns in some years and hurting in others. (Last year they had me pulling my hair out and this year they've had me jumping with glee). Honestly, I don't think they've made much of a difference over the past two decades.

    My simple explanation for holding a limited amount is that I feel that for retirees inflation is a greater long term threat than deflation. I could be completely wrong on that last assumption, but that's been my reason. (I'd define real assets broadly to include things like: commodities, natural resources & energy producers, precious metals, and real estate.

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