Morningstar's Investing in Commodities Week 2011

SPECIAL FEATURE: Commodities and your portfolio--the what, where, why and when of investing in commodities and their proxies

Holly Cook 12 September, 2011 | 3:34PM
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Predicting commodityreturns is normally difficult enough given the very broad spread, high volatility and problems associated with rolling over futures contracts on returns. But that has never stopped investors from donning their magpie glasses and seeking to add a hoped-for sparkle to their portfolios with investments in gold and precious metals, oil and gas, and all manner of natural resources from pork belly to maize. Indeed, commodities such as crude oil and industrial metals have fallen sharply during the recent sell-off but nowhere near as steeply as many other risk assets. Meanwhile gold, the run-to investment for many nervous investors, recently reached a new closing peak of $1,898 per ounce.

This week has been investigating the role of commodities in a diversified portfolio, whether it’s safe to view gold as a haven, the arguments for and against allocating assets to such products, and Morningstar’s take on specific vehicles available to those who want to tap into certain natural resources.

Commodity Essentials
Which Investment: Commodity Futures or Producers? Investors are hungry for commodity exposure, but should you buy into commodities or their futures?

What Is Gold Worth? The value of the yellow metal is in the eye of the beholder. 

Should You Have a Shine for Gold? (Archive) Why and how investors should add gold to their portfolios.

What Could Pop the Gold Bubble? (Archive) Morningstar's Scott Burns discusses the 3,000-year history of this asset, what could bring the price of gold down, and the state of precious-metal ETFs.

Understanding Crude Antiquities: WTI or Brent? Does it matter which price you monitor, and which is the more reliable marker of broader market activity?

Gold and Silver As an Asset Class (Video) Morningstar's Abraham Bailin and State Street's Anthony Rochte discuss shifts in thinking on gold, silver, and their application in a portfolio.

Latest Asset Allocation Views from OBSR Predicting commodity returns is difficult enough, but has become even harder as a result of sovereign debt and U.S. recession uncertainty, says OBSR, a Morningstar company.

No Bubbles for Commodities
A fundamental shift in the market means the days of abundant resources and falling prices are over forever, GMO's Grantham believes

The Role of Commodities
What Role for Commodities In Your Portfolio? Commodities exposure can help diversify your portfolio but ignore the high volatility at your peril.

Can You Prepare for Inflation? Commodities have become increasingly correlated with equities but still provide the clearest and most effective hedge against unexpected inflation.

Commodities Are a Rock In a Hard Place (Archive) It is increasingly difficult for investors using a passive asset-allocation strategy to benefit from commodity funds today.

Retirees: Look Before You Leap Into Commodities Bad timing could obliterate the long-term benefit of these investments.

Finding Real Diversification (Archive) Adding more asset classes, not securities, is the best way to diversify.

Gaining Commodities Exposure Via Equities
Top-Rated Funds for Commodities Exposure For investors seeking indirect exposure to commodities, these equity funds have attracted our top qualitative ratings.

Larger Oil Companies, Larger Challenges BlackRock’s Robin Batchelor told the Morningstar Investment Conference that smaller oil companies don’t have the same volume growth challenges that larger integrated oils players face.

Futures: The Sweet Spot for Financial Exchanges (Video) Morningstar's Michael Wong believes that as demand for commodities increases, exchanges speculating on raw-materials prices will see their fortunes rise.

The Case for BHP Billiton and Rio Tinto Morningstar Equity Research's head of basic materials spells out the case for investing in such mining giants.  

Investing in Commodities with Closed-end, Exchange-traded Funds
Visit Morningstar's ETF Education Centre Learn about investing in commodities with exchange-traded products.

Has Silver Lost Its Shine? The popularity of ETFs helped drive silver's price to relative highs. 

Much Ado About Copper Following the launch of the first exchange-traded product to be physically backed by the red metal, we ask is all the hype warranted?

New Research on Broad Basket Commodities ETFs Morningstar's ETF reseach team has launched new reports on six commodities ETFs this week; search our coverage for relevant funds.

Commodities in CEFs: Compounding the Volatility? Closed-end funds can be more susceptible to volatility but investors willing to take on the risk can also reap the reward.

The Commodity Condundrum PERSPECTIVES: Can commodities stay strong without inflation? asks iShares.

The Never-Ending Story of a "Gold Bubble"
PERSPECTIVES: U.S. Global Investors' Frank Holmes assesses the history of the 'gold bubble' and the outlook for the yellow metal

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites