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The Key to Commodity Investing: Avoid the Indexes and Seek Active Managers Instead. - Barron's

Updated Jan. 7, 2022 3:54 pm ET / Original Jan. 7, 2022 3:21 pm ET

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Of the more traditional commodities, Pimco’s Nicholas Johnson is most upbeat on oil.

Andrey Rudakov/Bloomberg

Investing in commodities requires an active approach. For starters, the two major commodities indexes differ considerably. The SP GSCI Commodity Index has about 50% in energy; the Bloomberg Commodity Index is one-third energy, one-third metals, and the rest in other commodities.

Neither index has enough in some of the commodities with the most promise. “Lithium, copper, tin—all of these electrification metals are going to have a big demand surge over coming years. These are not common in the indexes, but a good active commodities...