- Natural resources funds can be an ideal investment for some, but these funds are not for everyone.
- No load mutual funds perform as well or better than load funds, but they do not offer investment advice.
- The best no load funds do not charge any 12b-1 marketing fees.
Natural resources funds are one type of no load mutual funds which can offer a number of benefits and advantages to many investors, but these funds may not be for everyone and they do carry risks. A natural resources mutual fund investment can cover a wide variety of companies and industries. These can include logging, oil drilling, gas drilling, and all types of mining for resources like metals, including copper and iron, coal, and other natural resources. These no load mutual funds can also include companies that provide support to those who do the actual extraction of the natural resources, and this support can be provided by supplying needed products and services. Natural resources funds can help you diversify your investment portfolio, and these investments can be used as an inflation hedge if you choose no load mutual funds that do not have a big energy component. Some experts advocate finding a natural resource mutual fund that invests heavily in raw materials, because of the belief that these funds offer better returns, fewer risks, and less volatility. If you have natural resources funds which are heavy in the energy sector, this could lead to an energy heavy portfolio which faces higher risks.
One of the best no load funds when it comes to natural resources funds is the AIM Energy Inv Fund, with the trading symbol FSTEX. The fund offers net assets of more than three hundred and seventy million dollars, and received a four star quality rating from Morningstar. This natural resource mutual fund was started in 1984, and is currently being managed by Andrew Lees. Invesco Aim offers this fund, and the minimum investment amount is quite small at only one thousand dollars. The AIM Energy Inv Fund invests for capital growth, and this fund is energy heavy because eighty percent or more of the investments held in this fund portfolio are usually energy related. This can lead to bigger risks because it is not diversified. The total expense ratio for the fund is just over one point one percent, and it is considered one of the best no load funds when it comes to natural resources funds. When you choose no load mutual funds, it is important to do all of the necessary work and compare all the aspects of the different funds before choosing one, to make sure that you are choosing the right natural resources funds to fit your investments needs and acceptable risk levels.
The best no load funds in the natural resources sector will include those which are high quality. One way to tell this is to look at the Morningstar rating of the natural resource mutual fund. Morningstar has a rating system that ranges from one to five stars, and the more stars a fund has the higher their rating and quality are. These natural resources funds should not include any load fees or any 12b-1 marketing fees. Some no load funds will charge a small marketing fee that is used to pay for advertisement expenses, but these fees can also include hidden load fees with some deceptive mutual funds. This can be determined by comparing the net fund assets and the 12b-1 marketing expenses charged. If a fund has a 12b-1 marketing fee which is more than one fourth of one percent of the net assets of the fund then there could be hidden load fees involved. It is better to choose no load natural resources funds which do not charge any 12b-1 marketing fees at all. This makes it easier and involves less work and evaluation. A natural resources mutual fund can be a good investment for many investors, but you need to evaluate all of the aspects of each fund individually, to help determine which no load mutual funds are right for you and your investment needs.
May 30th, 2009 at 5:58 pm
I would have to agree that the raw materials funds would be a better choice. While specific types of resources can be high sometimes and very low others, the raw materials are almost always needed for some reason or another. This definitely keeps the risk down slightly.
May 30th, 2009 at 6:00 pm
I wish I would have known about the Morningstar rating before I started investing. It didn’t help that I was new at the whole thing and shouldn’t have been playing around on my own, but I looked an investment up on it after I lost a ton and found out I wasn’t even in a good fund.