CRB Commodity Index

CRB Commodity Index

After three years of negative sentiment and capital outflows, commodities appear to be coming back.  The Financial Times published an article yesterday highlighting the turning sentiment in commodities after $50bn of net redemptions in 2013. Some analysts are speculating that the renewed interest in commodities is related to their uncorrelated returns, making them popular as a portfolio diversifier. However, more than anything commodities are becoming attractive because prices are rising. After falling close to 30% since 2011, the CRB index is up more than 15% since January and has broken through several important trend lines.

Is this the start of a new trend? We beleive that in an Endowment styled portfolio an allocation to Commodities improves risk-adjusted returns.

(Source: GBI, etc.)