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February 19, 2006
Commodities becoming popular amongst investors
According to a recent research by Credit Suisse, commodities could become more popular than hedge funds among institutional investors. This basically stems from the fact that commodities are usually cheaper than hedge funds. In fact, so far, most schemes are allocating roughly 5 per cent to commodities. As a result, the allocation to equities is usually lower. Commodities in most cases are considered as a good tool for long-term strategic diversification. Also, these are considered advantageous as they demonstrate a low correlation with financial assets in markets around the world. These act as a natural inflation hedge, and perform quite well even when conventional assets are at a low.
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