Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an email. All information you provide will be used by Fidelity solely for the purpose of sending the email on your behalf.

The subject line of the email you send will be "Fidelity. Commodities are raw materials that are either consumed directly, such as food, or used as building blocks to create other products.

These materials include energy sources like oil and gas, natural resources like timber and agricultural products, or precious metals like gold and platinum. There are several ways to consider investing in commodities. One is to purchase varying amounts of physical raw commodities, such as precious metal bullion.

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Investors can also invest through the use of futures contracts or exchange traded products ETPs that directly track a specific commodity index. These are highly volatile and complex investments that are generally recommended for sophisticated investors only. Another way to gain exposure to commodities is through mutual funds that invest in commodity-related businesses.

For instance, an oil and gas fund would own stocks issued by companies involved in energy exploration, refining, storage, and distribution. Do commodity stocks and commodities always deliver the same returns?

As you can see in the chart below, there are times when one investment outperforms the other. Maintaining an allocation to each group may help contribute to a portfolio's overall long-term performance.

Over time, commodities and commodity stocks tend to provide returns that differ from other stocks and bonds.

However, diversification does not ensure a profit or guarantee against loss. Individual commodity prices can fluctuate due to factors such as supply and demand, exchange rates, inflation, and the overall health of the economy. In recent years, increased demand due to massive global infrastructure projects has greatly influenced commodity prices.

In general, a rise in commodity prices has had a positive impact on the stocks of companies in related industries.

Inflation—which can erode the value of stocks and bonds—can often mean higher prices for commodities. While commodities have shown strong performance in periods of high inflation, investors should note that commodities can be much more volatile than other types of investments. Commodity prices can be extremely volatile and the commodities industry can be significantly affected by world events, import controls, worldwide competition, government regulations, and economic conditions, all of which can have an impact on commodity prices.

There is a chance your investment could lose value. Mutual funds or exchange traded products ETPs that track a single sector or commodity may exhibit higher than average volatility. Also, commodity funds or ETPs that use futures, options, or other derivative instruments may further increase volatility.

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Apart from the risks associated with commodity investing, these funds also carry many of the risks that go along with investing in foreign and emerging markets, including volatility caused by political, economic, and currency instability.

While commodity funds can play a role in a diversification strategy, the funds themselves are considered non-diversified as they invest a significant portion of their assets in fewer individual securities that are generally concentrated in one or two industries.

As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a more diversified fund. Commodity focused stock funds may use futures contracts to track an underlying commodity or commodity index. Trading in these types of securities is speculative and can be extremely volatile, potentially causing the performance of a fund to significantly differ from the performance of the underlying commodity. Diversification is the practice of spreading your investments around so that your exposure to any one type of asset is limited.

This practice is designed to help reduce the volatility of your portfolio over time. Types of mutual funds.

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Understanding the risks involved with investing and your own tolerance for risk—as well as your desire to involve yourself in the management of your investments—is key to helping you choose the fund or funds that best meet your investing needs. Mutual funds from Fidelity. Investing with Fidelity gives you access to over 10, funds from hundreds of fund companies, making it easy to find the right funds for any investment need.

Use our Mutual Fund Evaluator to search among thousands of funds available through Fidelity, filtering and sorting for a range of performance criteria and fund characteristics, including ratings from Morningstar and other independent experts. Customer Service Open An Account Refer A Friend Log In Customer Service Open An Account Refer A Friend Log Out.

Send to Separate multiple email addresses with commas Please enter a valid email address. Your email address Please enter a valid email address. About commodity investing Intermediate Commodities. Please enter a valid e-mail address.

Important legal information about the e-mail you will be sending. By using this service, you agree to input your real e-mail address and only send it to people you know.

It is a violation of law in some jurisdictions to falsely identify yourself in an e-mail. All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf. The subject line of the e-mail you send will be "Fidelity. Your e-mail has been sent. Related Lessons Why diversification matters Diversification is the practice of spreading your investments around so that your exposure to any one type of asset is limited.

Types of mutual funds Understanding the risks involved with investing and your own tolerance for risk—as well as your desire to involve yourself in the management of your investments—is key to helping you choose the fund or funds that best meet your investing needs. Mutual Funds at Fidelity Mutual funds from Fidelity Investing with Fidelity gives you access to over 10, funds from hundreds of fund companies, making it easy to find the right funds for any investment need.

Research mutual funds Use our Mutual Fund Evaluator to search among thousands of funds available through Fidelity, filtering and sorting for a range of performance criteria and fund characteristics, including ratings from Morningstar and other independent experts. Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.

Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against loss. It is not possible to invest directly in an index. Energy, Metals, and Agriculture sectors. The sector capped weighting scheme gives equal weight to the energy, metals, and agriculture sectors at each Quarterly Index Review. The Dow Jones UBS Commodity Index is a liquid and diversified benchmark for commodities as an asset class.

The index is composed of futures contracts on 19 physical commodities that are traded on U. Commodity futures contracts specify a delivery date for the underlying physical commodity. In order to avoid delivery and maintain a long futures position, nearby contracts must be sold and contracts that have not yet reached the delivery period must be purchased. The Fund Evaluator is provided to help self-directed investors evaluate mutual funds based on their own needs and circumstances.

The criteria entered is at the sole discretion of the user and any information obtained should not be considered an offer to buy or sell, a solicitation of an offer to buy, or a recommendation for any securities.

You acknowledge that your requests for information are unsolicited and shall neither constitute, nor be considered as investment advice by Fidelity Brokerage Services, LLC. Stay Connected Locate an Investor Center by ZIP Code.

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