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ETF Specialist

Gold vs. Broad-Basket Commodity Exposure

Both have their benefits, but your investment time frame is key.

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The broad commodity space has realized significant gains over the past several years. Not surprisingly, a proliferation of interest in hard assets and commodity investments followed by both investors and product providers.

Commodity demand has been driven to a large degree by a number of economic and political developments. Historically, commodities have been found to provide several portfolio level benefits: They have provided diversification away from the correlation of traditional asset classes and have served well as an inflationary hedge. Following the market downturn of late 2008 and early 2009, investors scrambled into hard assets for their diversification benefits. Shortly thereafter, the U.S. Fed adopted an extremely loose monetary policy, which bolstered demand for commodities as inflationary hedges.

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Abraham S.H. Bailin does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.