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Drew Corbett is head of investment strategy at BetaShares. BetaShares has a number of commodity ETFs.

While most advisers are familiar with investing in equities and fixed-interest asset classes, commodities (perhaps with the exception of gold) have historically received comparatively little attention in investment portfolios.

One of the reasons for this may be the difficulty that advisers have traditionally had in gaining transparent, liquid and efficient access to commodities. However, such difficulties are now being ameliorated.

The recent launch of commodity-focused exchange-traded funds (ETFs) allows investors to simply gain exposure to commodities along with the flexibility to buy and sell ETF units on the Australian Securities Exchange (ASX) in the same way as a normal share.

At a Credit Suisse institutional investor day in 2011, more than half the investors surveyed said they were planning on being overweight commodities over the coming 12 months. For example, the large New Jersey public pension plan doubled its allocation to commodities in 2011.

Clearly, large institutional and sophisticated investors have started increasing exposures to commodities as part of their strategic asset allocation. Why is this? We examine the primary uses of commodities below.

Enhancing portfolios

Investors with a particular view on either a single commodity (for example, gold or oil) or broader groups of commodities (for example, a broad commodities basket or agricultural basket) may seek to invest in commodities to attempt to profit from this view.

Commodities have, over the past 10 years, performed favourably and exhibited low return correlations to other major asset classes.