Mirae Asset recently filed its application with the market regulator to set up a global commodity stocks fund that will invest 65 per cent of its corpus in stocks or mutual funds operating in the Asia-Pacific region and emerging markets.

Similarly, Tata Mutual Fund is proposing to launch a gold and precious metals fund that will invest in mining companies. Even ING has filed for a Latin America fund, which will invest in stocks in that region. Since the region is known for its rich natural resources, commodity stocks would be a part of the fund.

Most of the funds are planning to take a feeder-fund structure, whereby the fund will invest in a global fund that has a past track record. Globally, this theme has done quite well.

For instance, Blackrock's World Energy Fund is one such fund that has returned 35 per cent in the last one year (between May 9, 2007, and May 9, 2008). Last year, DSP Merrill Lynch launched the first feeder fund in India, which invests in gold mining companies through its parent company Merrill Lynch World Gold Fund.

Said Dhruva Chatterjee, research analyst, Lipper, "Mutual funds are basically trying to capitalise on rising energy and metal prices. However, investors should remember that the kind of heated-up activity that is going on in commodities, one can never guess when the market will crash."

And the numbers depict this. With crude oil prices shooting up to $126 a barrel and metal prices following the same route, stocks of these companies are enjoying significant attention in international markets.

Financial experts say that such funds can be a good option for an investor looking to invest in overseas markets.

Gaurav Mashruwala, a financial planner, said, "First-time investors should start by investing 2 to 5 per cent of their portfolio in such funds. They can then gradually increase it to 10-15 per cent."

Before investing, however, one needs to look at finding out whether it is a feeder fund or managed by fund managers from India. This is because feeder funds invest in funds with a proven track record that is well-documented. Also, find out about the cost of hedging because when investing abroad, the fund will have to convert the Indian rupee into foreign currency. This will lead to some additional costs.