Caution is the key with commodity profits

By Hannah Smith

Regulator seeks to grow retail interest in asset class, with 3%-7% position becoming increasingly commonplace for diversification

The FSA is looking to promote further retail investment in commodity markets, despite warning advisers and investors to be aware of the risks involved. The regulator released a paper this month outlining some of the challenges commodity investors might face. That said, its overall slant is very positive, noting a growing number of fund managers see a 3%-7% commodity holding as a good way to diversify an equity and bond-heavy portfolio. Commodities have historically been part of a small and specialised market dominated by professionals, which has received less attention than higher profil...