For anyone wishing to diversify Wisdomtree Commodity Securities (LON:COCO) is a possibility. The ETF is linked to the price of cocoa which is currently rising faster than the price of most other commodities including oil.
Reasons for investing:
1. Diversify into commodities
2. Chocolate products are increasingly popular year on year
3. Hedge against inflation
4. Priced in USD so the current falling GBP is favourable to UK investors
5. Strong momentum (64% return over last 12 months)
Reasons for caution
1. Commodity prices can fluctuate widely (max drawdown last 3 years is 24%)
2. Expense ratio 0.49%
3. No dividend
4. Small fund (only £8M AUM)
I don't hold though I occasionally spread bet on commodities. But I am considering this one for my ISA.
