Introduction
Commodities can play a useful role in client portfolios as diversifiers.
Traditionally, gold has been known as a so-called 'safe haven' for investors, given how it behaves in relation to traditional assets.
Certainly, with so many geopolitical risks on the horizon, investors might want to consider how they are allocated to commodities, whether that is oil or gold.
As Ed Kuczma, co-manager of the BlackRock Latin America Investment Trust, notes: "Commodity prices generally ended 2018 on a downward trend, fuelled by concerns over Chinese growth.
"2019 has seen subtle improvements in demand supported by recent expansion in Chinese PMI data."
This guide looks at the correlation between commodities and traditional asset classes, such as equities and bonds, particularly during times of stock market volatility or heightened geopolitical tensions.
It also considers what the outlook is for physical gold and where oil prices are headed this year.
Finally, how much should clients allocate to commodities in their portfolios, given the political and economic backdrop?
This guide is worth an indicative 60 minutes of CPD.
Contributors to this guide: Mihir Kapadia, chief executive of Sun Global Investments; Terence Brennan, portfolio manager of the Lazard Commodities fund; Jake Hanley, marketing director of Teucrium Trading; Caroline Bain, chief commodities economist at Capital Economics; Robert Johnson, chairman and chief executive of Economic Index Associates; Geoffrey Cher, business development lead at Digix; Juan Carlos Artigas, director of investment research at the World Gold Council; Adrian Ash, director of research at BullionVault; Robert-Jan van der Mark, co-manager of the Kames Diversified Growth fund; Lyxor Asset Management; Catherine Braganza, senior credit analyst at Insight Investment; Chris Teschmacher, multi-asset fund manager at Legal and General Investment Management; Ben Kumar, investment manager at Seven Investment Management; James de Bunsen, portfolio manager at Janus Henderson Investors; Gregory Perdon, co-chief investment officer at Arbuthnot Latham; Patrick Connolly, a chartered financial planner at Chase de Vere; Mark Lacey, head of commodities at Schroders; Peter Elston, chief investment officer at Seneca Investment Managers; Aneeka Gupta, associate director of research at WisdomTree; David Scott, investment manager at Andrews Gwynne; Teucrium Trading.
Saloni Sardana and Victoria Ticha are features writers at FTAdviser and Financial Adviser
