Market unrest prompts caution over commodities as diversifying asset class

Life insurers and pension funds have been using commodities as a portfolio diversifier for years. Blake Evans-Pritchard reports on how the asset class is evolving

Eggs in a basket

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As the financial markets have been buffeted by the fallout of the 2008 credit crunch, gold has proven its worth as a solid investment bet. Although it lost some of its shine as the crisis pushed the prices of assets everywhere downwards, it fell far less sharply than other asset classes, such as stocks and bonds.

Part of this, investors say, is because gold – like many other commodities – tends to have a low or negative correlation

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