Long-term bets can still pay off in commodity funds, say analysts

Moderate your return expectations after the 18-month bull run

Consumer price index (CPI)-based inflation rose to 6.07 per cent in February, up from 6.01 per cent the previous month. High inflation is beginning to pinch household budgets. One way investors can hedge its impact on their finances is by investing in commodity funds.

Chinese pivot reduced supplies

Commodity funds have delivered an average return of 23.9 per cent over the past year and 15.2 per cent annualised over the past three years. Several factors contributed to this performance.

Commodity companies’ realisations have increased steeply over the past 18 months. Says Rohit Singhania, co-head of equities, DSP Investment Managers: “This led to an