Common Fund for Commodities Définition simple (2024)

FAQs

What is a common fund for commodities? ›

The Common Fund for Commodities (CFC) is an autonomous intergovernmental financial institution, established in 1989 within the framework of the United Nations. The CFC provides support to projects investing in commodity value chains to deliver sustainable development impact from “field to the fork”.

Commodity funds invest in raw materials or primary agricultural products, known as commodities. These funds invest in precious metals, such as gold and silver, energy resources, such as oil and natural gas, and agricultural goods, such as wheat.

A common fund is a form of collective investment scheme based upon contractual law rather than being enacted through a trust, corporation or insurance policy. The model for this type of arrangement is the Fonds commun de placement common in France and Luxembourg.

Three of the most commonly traded commodities include oil, gold, and base metals.

Key Takeaways

Common stock funds have typically been mutual funds but can also include exchange-traded funds (ETFs). Types of common stock funds include broad-based funds and index funds.

A commodity is any useful or valuable thing, especially something that is bought and sold. Grain, coffee, and precious metals are all commodities. The word commodity is usually used in an economic context, as in importing commodities from other countries or trading in the stocks and commodities markets.

Commodity money has been used throughout history as a medium of economic exchange. Commodity money is money that has intrinsic value, meaning that it has value even if it is not used as money. Examples of commodity money include precious metals, foodstuffs, and even cigarettes.

Price Volatility: Commodity prices can be highly volatile, causing fluctuations in Commodity Funds' Net Asset Value (NAV). Uncertain Returns: Like all investments, commodity investments come with inherent risks, and returns are not guaranteed. Before investing, investors should evaluate their risk tolerance carefully.

USO was the first commodity ETF based on crude oil launched in the United States.

What is the common fund rule? ›

The common fund doctrine is a law that protects injured victims from having to bear the entire cost of attorney fees without help from the insurance company. It entitles a party who recovers a common fund for the benefit of others to reasonable attorney's fees from the fund as a whole.

A fund is a pool of money set aside for a specific purpose. The pool of money in a fund is often invested and professionally managed in order to generate returns for its investors. Some common types of funds include pension funds, insurance funds, foundations, and endowments.

Since commodity funds have no guaranteed returns, they are not suited for investors seeking fixed returns or assured growth. Therefore, commodity funds are best-suited to investors with higher risk tolerance and a long-term investment horizon.

Commodities are typically sorted into four broad categories: metal, energy, livestock and meat, and agricultural products.

Commodity money is money that has value apart from its use as money. Mackerel in federal prisons is an example of commodity money. Mackerel could be used to buy services from other prisoners; they could also be eaten. Gold and silver are the most widely used forms of commodity money.

A common stock fund is an investment fund that invests in the common stock of public companies. Common stock is the stock of a company that comes with no special privileges, such as guaranteed dividends or preferred creditor status.

A common investment fund (CIF) is a means of pooling the investments of a number of pension schemes to centralise management of those investments and provide economies of scale in running costs. The participating schemes must all be registered pension schemes of the same employer or associated employers.