Commodities staying firm

barclays study shows commodities perform best when equities and bonds are at their worst

Commodities investment will continue to produce good returns this year but investors should be cautious of passive exposure, according to the Barclays Equity Gilt Study 2005. Figures from the group show that over the past five years, a passive, long-only investment in the Goldman Sachs Commodity index would have generated an average annual return of around 15%, outstripping stocks and bonds. Commodities have negative correlation with other asset classes, particularly equities and bonds, making diversification a key argument for holding them. Kevin Norrish, head of commodities research at...