Commodity investing is gaining a lot of attention due to it's diversification and hedging properties. But building the ideal portfolio is not that simple.
The Ideal Portfolio
With inflation hitting double digits, investors are once again screening financial markets to source hedges for their portfolio against further price rises. Consequently, commodities are firmly back on the agenda, even at the current elevated prices.
The benefits that commodities bring to a multi-asset portfolio are widely understood - low correlation to other asset classes resulting in a more efficient and diversified portfolio, coupled with hedging properties when inflation is rising.
The bigger challenge is how to build a commodity portfolio that captures all these benefits. It is not as simple as it seems. And finding an investment manager that has the resources and experience to manage such a portfolio is even more difficult.
Passive Versus Active Approaches to Commodity Investing
Solutions or Simple Exposure