This Day On The Street
Continue to site
ADVERTISEMENT
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

Weighing 2 Commodity Producing Funds

NEW YORK ( TheStreet) - When it comes to accessing commodity-producing companies, there are a wide variety of ETF and mutual fund options investors can consider.

For instance, funds such as the Market Vectors Agribusiness ETF (MOO), the SPDR S&P Metals & Mining ETF (XME), and the iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) are strong choices for investors looking to gain exposure to companies that will benefit from specific pockets of strength within the commodities realm.

However, in today's environment where strength appears to be present across all reaches of the commodities spectrum, a more diversified product may prove to be the most suitable and effective option for conservative investors. The Market Vectors RVE Hard Assets Producers ETF (HAP) and the Fidelity Global Commodity Stock Fund (FFGCX) are two funds which offer investors one-stop-shop access to all walks of the resources industry, offering exposure to miners, energy producers, and agricultural goliaths under one roof.

Despite the similar investment strategies of these products, HAP has managed to score a slim lead on its mutual fund competitor throughout the opening weeks of 2011. By digging into the internal workings of these two funds, it is possible to identify slight variations have led to their deviation from one another.

For instance, FFGCX's heavier exposure to miners within its top 10 holdings has likely played a role in subduing the fund's gains in recent weeks. Whereas HAP's index is commanded by agriculture and energy-related companies such as XOM, Potash of Saskatchewan (POT) and Deere (DE - Get Report), FFGCX is headlined by BHP which, comparatively has lagged. Vale and Rio Tinto (RIO) can also be found among the mutual fund's top 10 holdings.

Deere is one company that is noticeably absent from FFGCX's top holdings. The recent food rally has proved wildly beneficial for this agricultural machinery manufacturer, lifting shares of DE 13% this year. Looking ahead, the company appears primed for further strength. This week the firm reported record first quarter earnings. Following up the announcement, Deere raised its outlook for the coming year.

While HAP dedicates 4% of its index to this firm, within FFGCX, DE accounts for only 0.016% of its portfolio.

Ultimately, although HAP has seen a slightly stronger start to 2011, I would not advise investors to write off FFGCX.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DE $93.68 0.00%
HAP $34.86 0.00%
IEZ $50.56 0.00%
MOO $56.98 0.00%
XME $27.15 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs