Can Commodities, Metals Make A Comeback With U.S. Institutional Investors?

U.S. allocators in recent years have sought out alternative risk premia to diversify their portfolios while remaining focused on strategies trading public, liquid instruments in mostly either equity or fixed income markets. At the same time, pressure on allocators to consider the environmental impact of their investments has also driven some away from considering a diversifying allocation to commodities or metals. But this week the Alaska Permanent Fund Corporation announced it would consider a 3-5% allocation to gold. A further analysis of recent allocation announcements by U.S. public plans in MandateConnect also suggests that more are considering adding some commodities, metals or natural resources exposure as part of new diversifying allocations this year.