Many people are attracted to investing in commodity mutual funds. The reasons are obvious. For one, the potential returns are spectacular. Notable billionaire George Soros made his fortune from investing in commodities. The market is significantly more volatile compared to other asset classes and thus the possibility of big returns are definitely there. The investment return of commodities is also uncorrelated with stocks and bonds. This will add diversity to your portfolio and stabilize its performance.

But how does one find the top commodity mutual funds? This is an extrmely important question. The performance of mutual funds vary widely. Some funds are essentially startups and owned by companies looking to cash in on a trend. Others are run by well-seasoned fund managers with decades of experience in the market. Proper online research is the only way to figure out the top funds. Although this can be quite time consuming, it is well worth it in the end because it is your money at stake. A few extra percentage points of financial return every year can add up to thousands after a period of time.

For one, keep up with all the major financial magazines. This includes Money magazine and Kiplinger's. They can be confusing at first. But financial literacy is priceless. You might think you can just stick with online sources. But magazines usually have much higher editorial standards and are willing to put in much more background research. The articles will tend to be more concise as the internet is notorious for producing lots of information rather than knowledge.

Second, do keep up with the major financial sites. This includes Morningstar, which is an excellent source of performance information. Play around with the tools. You can compare returns over different periods of time and against different types of benchmarks. There is also information on fees, frequently called the expense ratio. The site is great because it is easy-to-use and amalgamates the information from lots of funds. Using the site will save you a lot of time because you won't have to go to multiple fund company websites to gather their information.

Third, you should consider following financial blogs. There are dozens available on the internet. After reading them for awhile you should be able to figure out what are the best-researched ones. You will probably be overwhelmed by all the information so unsubscribe from the ones that you don't like.

Top commodity mutual funds can be an excellent component for your portfolio. Finding them though is tricky. However, if you make a good effort it is far easier than finding a needle in a haystack. In the end, it comes down to how much information you do. Follow financial magazines, sites and blogs to properly educate yourself on the options you have available.