Broad commodities: the portfolio super diversifier
As the European leader in commodity exchange-traded funds (ETFs) and exchange-traded commodities (ETCs), investors have been relying on WisdomTree products to access the asset class since 2004. Our comprehensive range of broad commodity ETFs include diversified baskets with varying exposures, capturing anything from energy resources and metals to agricultural goods.
A staple within many multi-asset portfolios, broad commodity baskets rose to prominence in 2020 when global exchange traded-product (ETP) flows exceeded $6 billion1 — an effect driven by COVID-induced supply-side shocks across the commodities complex. The strong demand for broad commodities from ETP investors didn’t end in 2020, though. As pandemic supply disruptions rumbled on, 2021 witnessed global net inflows of $13.2 billion2 pour into broad commodity ETPs.
But such is the appeal of broad commodities: allowing investors to align their portfolios with different economic regimes and opportunities across multiple sectors and numerous products.
But commodities aren’t just a tactical play for the short-term investor. Economists have long advocated for the use of broad commodities in long-term strategic asset allocations due to their unique characteristics. Research demonstrates that their risk premium has historically paid above inflation over the long term, and offered downside protection during inflationary market conditions when their prices typically appreciate in line with rising demand.
1 Bloomberg, 9 April 2021.
2 Bloomberg, 6 January 2022.
Broad commodities: a versatile asset in a portfolio
To learn more about the role of broad commodities in a portfolio, view our Portfolio Insight.
Broad Commodities by WisdomTree
There are many ways to access the asset class through our diversified commodity ETFs. Our innovative solutions range from benchmark-tracking products to enhanced strategies with dynamic futures selection mechanisms. We also offer currency hedges and sector exclusions to match varying investment needs.