The natural resources sector includes companies engaged in extraction of commodities such as coal, metallic ore, sand, gravel, and oil shale. It may also include logging and drilling for oil and gas.
Natural resource investing has long been staple in strategic asset allocation. Natural resources act as store of value, especially during times of rising inflation or currency depreciation. Nevertheless, the industry carries risk such as adverse economic, political, and regulatory developments. Due to these potential pitfalls, investing in natural resources only makes sense as part of a well-balanced portfolio. One way to access this industry is through mutual funds.
