Commodities are becoming a Wall Street Favorite

  • Commodities do well in the mid-to-late stages of an economic cycle for reasons including demand and inflation hedging, because commodity prices usually rise when inflation is accelerating, and thus, they offer an effective protection
  • In addition, they provide the benefit of diversification as their correlation with other assets such as stocks wanes
  • Not surprisingly, the interest in gaining commodity exposure has risen among market participants. For instance, the iShares Commodities Select Strategy ETF was able to double its AuM, with very strong inflows at the beginning of April 2018