Commodities the asset class to watch amid looming rate cuts, macroeconomic uncertainty

COMMODITIES have typically been used by investors to help diversify their portfolios and as a buffer against macroeconomic shocks, but market watchers polled by The Business Times say investors should now keep a closer eye on the asset class.

The sector often serves as a diversification tool, as its returns are independent of those from equities and bonds. Commodities are also an asset class that is set to benefit from the impending interest rate cuts by the US Federal Reserve. 

Analysts of Bank of America’s global commodity research team said returns from commodities have lagged those of equities and bonds for several years due to weaker spot prices, near-zero Treasury bill returns and a negative roll yield.