Investing in commodity mutual funds is one of the best ways to cover a portfolio that would otherwise be dominated by actions against unexpected financial or political crises or ordinary economic recessions. To take advantage of this inverse relationship between stock and commodity prices, investors have two options. The first is to buy commodity mutual funds as a hedge against inflation. The two best-known funds are the Oppenheimer Real Asset Fund (QRACX) and the PIMCO Commodity Real Return Strategy (PCRAX) fund.
For example, it is possible to invest in gold mutual funds, natural resource mutual funds, oil companies, and other energy funds. Portfolio Diversification Many investors use commodities to diversify, as commodity yields tend to move in the opposite direction to stocks and bonds due to the low or negative correlation between the three types of assets.