Commodity-focused mutual funds' incredible multiyear run is leading some investors to wonder how much upside could possibly remain. But strong demand for...

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Commodity-focused mutual funds’ incredible multiyear run is leading some investors to wonder how much upside could possibly remain. But strong demand for raw materials likely means these funds can deliver additional gains, at least longer term.

While the sector may be due for a correction in the next six months or so, global demand is expected to buoy the funds over the next several years.

“In the near term, it does look like it’s run too far, too fast,” said Mihir Worah, manager of the $13.9 billion Pimco CommodityRealReturn Strategy Fund. “But the longer-term picture is unchanged; commodities are going to do well over the next three, five, 10 years; in my mind, there’s no doubt about it.”

On average, natural-resources mutual funds have gained nearly 4.6 percent this year through May 1, compared with a nearly 3.4 percent loss for the Standard & Poor’s 500-stock index (total return), according to investment-research firm Morningstar. In the past 12 months, natural-resources funds are up nearly 30 percent, according to Morningstar.

Natural-resources funds include a diverse group of investments, from those that focus on oil or, more broadly, energy, to those that keep only a foot in energy or mining stocks, said Michael Herbst, a fund analyst at Morningstar. At the most diversified end of the spectrum are a few funds, such as the Pimco fund, designed almost to be used as inflation hedges, he said.

With inventories for many raw materials unusually low and strong growth in emerging countries, commodity prices should continue their upward trajectory, said Worah.

“There’s too much demand from emerging economies for energy and metals, and not enough supply,” he said, noting that creating new supplies involves long cycles.

A near-term correction may be most likely in the agricultural sector, Worah said.

“While we can’t start a new copper mine or generate oil that easily, if wheat prices go up, farmers can just plant more wheat,” Worah said. However, even there, the long-term-demand picture remains unchanged, he said.