How to Invest in Commodities

Historically, the portfolio construction process has focused on two asset classes: stocks and bonds. But in recent years investors have become increasingly interested in utilizing additional assets within their portfolios, seeking out non-traditional securities that may be capable of enhancing returns, smoothing volatility, or both. Interest in commodities in particular has surged, as investors have sought out exposure to natural resource prices as a “third asset class” to optimize traditional stock-and-bond portfolios.