Despite strong performance this year, the portfolio allocation for commodities remains very small compared to other asset classes.
It has been always advised “not to put all your eggs in the same basket”, promoting diversification in the portfolios. However, in the last few years diversification was harder to achieve. Indeed, one would invest in bonds as a cushion facing the stocks allocation held in the portfolio but lately, we have globally seen a positive correlation between those two assets classes (except in China) in opposition with commodities which represent an asset class itself very diversified by nature as it gathers precious metals, energy, industrial metals...
ETFs and Funds can provide exposure to this asset class either through a single commodity or a basket of commodities.
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