This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Miners Drive Global Commodity Stock Fund

Stocks in this article: FFGCX FSAGX RTP

NEW YORK ( TheStreet) -- A mutual fund from Fidelity that has generated a lot of interest from my readers is the Fidelity Global Commodity Stock Fund (FFGCX).

Emerging-market demand, supply constraints and inflation are among the reasons often cited in favor of commodities, but it didn't hurt that many companies have seen their stocks rebound very sharply off their lows.

One advantage to investing in companies that produce commodities, rather than the commodities themselves, is the benefit from leverage. For instance, if oil costs $80 per barrel and it goes to $100, you would gain 25 percent investing in oil. A company that produces oil at a cost of $60 a barrel would see its profit on each barrel rise from $20 to $40, a gain of 100 percent.

It doesn't work out that easily in real life, however, because the price of the commodity must increase faster than expenses. Farmers use fertilizers, miners need drills and oil producers need pipes, in addition to the energy that all three consume. Besides higher material and energy costs, there's also the risk of higher wages.

The best time to own commodity-producing companies is when the demand for commodities causes them to rise faster than overall inflation. Many commodity bulls believe that greater demand from emerging markets, especially China and India, will drive prices higher with or without inflation. For those who expect higher commodity prices due to devalued currency, however, it's best to stick with the commodity itself.

Back in June, when I first analyzed FFGCX, it had just launched and there wasn't much performance history or even a list of its holdings. We knew that it would be managed by Joe Wickwire, who also manages Fidelity Select Gold (FSAGX), and that it would track the MSCI All Country World Commodity Producers Sector Capped Index.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs