Gold and silver are getting most of the adulation in the commodities complex in 2025, and rightfully so. That’s because those metals are rocketing higher. Their stellar 2025 showings are leaving stocks in the dust. That’s reminding market participants that equities and bonds aren’t the only games in town.
With ETFs such as the Neuberger Berman Commodity Strategy ETF (NBCM ) delivering solid upside this year, investors may be inclined to think commodities are capital appreciation tools. That can be true, but the asset class offers other benefits. For example, commodities are excellent inflation hedges with gold, NBCM’s largest holding, being a prime example.
“A 1 percentage point surprise increase in US inflation has, on average, led to a real (inflation adjusted) return gain of 7 percentage points for [commodities. That] same trigger caused stocks and bonds to decline 3 and 4 percentage points,” according to Goldman Sachs.
NBCM for Diversification
The actively managed NBCM is diversified. It’s home to multiple commodities. That means investors don’t have to select just one or two and hope to get it right. NBCM alleviates that burden while helping investors diversify equity and fixed income portfolios.
“From a tactical perspective, commodities can offer opportunities from time-to-time,” said Rob Haworth, senior investment strategy director for U.S. Bank Asset Management. “This is best in circumstances where a broad commodity complex is in short supply, driving up prices.”
Adding to the case for NBCM is the point that this year’s commodities resurgence is being supported by multiple factors, not just the declining dollar, though that certainly helps.
“Commodities are making a comeback. After a decade of being overlooked, shifting macroeconomic forces are bringing this asset class back into focus. Recent structural inflation, supply chain realignments, and energy transition policies have renewed the case for commodities in institutional portfolios. Investors who dismissed commodities as a cyclical play may need to rethink their stance—because this time, the drivers are different,” noted Reasonz Capital.
Regarding NBCM’s diversification perks, it’s not just about adding another asset class to portfolios. It’s about adding one that’s truly not correlated to the investor’s other positions.
“Historical data suggests that commodities exhibit a low to negative correlation with fixed income and only a modest positive correlation with equities. According to PIMCO, commodities have historically maintained a correlation of -0.27 with bonds and 0.24 with [stocks. That makes] them an attractive diversifier,” added Reasonz.
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