Asian investors tend to miss the diversification benefits of commodities, which have a low correlation to stocks, said Jodie Gunzberg, global head of commodities and real assets at S&P Dow Jones Indices. “In developed markets like the US and Europe, commodity investors are more educated on longer term inflation protection, diversification and managing risks,” she said in a briefing yesterday. “Here in Hong Kong, in Korea or in Taiwan, investors will ask, `What’s the most volatile commodity and how many times can we leverage that?’ It’s a completely different frame of mind.” Commodities typically account for 5-10% of an average portfolio in the US and the level is similar in Asia, she said. But for portfolios using a risk parity strategy, which focuses on risk level, exposure to commodities can be higher, sometimes up to 18%. Read entire article >>
[Source: Fund Selector Asia – by Imogene Wong – May 20, 2016]
