Talking Commodities, Contango, and ETFs With Satch Chada

Satch Chada is the Managing Director and Global Head of Investor Solutions for Jefferies Asset Management, LLC. He recently took time out of his busy schedule to discuss some of the nuances of commodity investing and offer his thoughts on the various forms of commodity exposure now offered by exchange-traded products. ETF Database (ETFdb): Over the last few years there has been a tremendous surge in interest in commodities as an asset class. What is the appeal of adding commodity exposure to a traditional stock and bond portfolio? Satch Chada (SC): From a portfolio diversification perspective, commodities have historically provided some merit in terms of diversification. They have had a tendency to have low to negative correlation to both the equity and bond markets. By adding commodities, you may have a better ability to weather extreme volatilities than a portfolio consisting of just bonds and equities. That’s the first step; the second [...] Click here to read the original article on ETFdb.com. Related Stories: How Contango Impacts ETFs ETFdb TV: Talking Commodities “Optimum Yield” ETFs: A Contango-Free Alternative?