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Speculating on commodities can add diversity to your portfolio

Anyone with an equity fund that tracks the S&P 500 has something close to 10 per cent of their investment in commodities companies, such as oil and gas producers or the miners of metals and minerals. For anyone who owns the FTSE 100, the figure is more than 20 per cent, largely because BP and Shell dominate the UK stock market.

Yet an increasing number of financial advisers suggest that investors should also carve out an additional piece of their portfolio to invest directly in commodities.

The advice is controversial but for many people who are considering moving beyond a “plain vanilla” portfolio of stocks and bonds, commodities will be an obvious option to consider.

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