Investing in commodities as a diversification tool

As growth picks up in the global economy, we expect economies to consume more resources to continue expanding and that demand may put upward pressure on commodity prices. Yet there may also be head winds. Are commodities on the way up? What next for China? What will populism throw up next? In addition, commodities are typically driven by underlying factors unconnected to those driving equities and fixed income. This means they offer the potential for uncorrelated returns and an allocation to commodities can is one of the ways to diversify a typical portfolio.