Aim: Growth by investing globally in exchange traded funds and other investment funds offering exposure to commodities and commodity shares
Minimum investment: Lump sum £1,000
Investment split: 28% petroleum, 18% precious metals, 18% metals industry, 18% grains, 7% softs, 7% exotic & other, 4% natural gas
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5%, annual 1.75%
Commission: Initial 3%, renewal 0.5%
Tel: 024 7623 6223
iFunds, a franchise of Raymond James Investment Services, has launched the MFM iFunds ETF commodity fund, a commodity-based fund of funds investing mainly in exchange-traded funds.
Putting the fund into its market context, Capital Trust Financial Management partner Bruce MacFarlane notes that the last three to four years has witnessed a massive increase in demand for global commodities. “It has seen a dramatic increase in asset prices from oil to gold shares, yet these markets remain relatively inaccessible to the retail investor. As such, the MFM iFunds ETF commodity fund offers investors the opportunity to invest in a diversified portfolio of commodity backed investments held primarily through commodity-based exchange-traded funds,” he says.
According to MacFarlane, ETFs provide attractive liquidity and real-time dealing benefits with competitive dealing rates. “The fund manager will aim to weight the portfolio in commodities that offer the best potential as determined by likely global demand. Fund charges and adviser remuneration are very much in line with he market,” he says.
Moving on to the potential drawbacks of the fund MacFarlane says: “The product looks fine but like many product launches it has been launched on the back of an already very strong market – the commodity bull market. The launch timing may prove better for the manager than perhaps the hapless investor who has proved so often wrong with their market timing.”
Scanning the market for potential competitors MacFarlane says: “The fund is relatively unique but other specialist funds such as the JPM Natural Resources or M&G Global Basics are worth consideration as alternatives.”
MacFarlane concludes: “All in all the fund is worth consideration if your clients are looking for exposure to the global commodity markets.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average