There are three key asset classes that investors can gain access to commodities through: physical markets, futures markets or equities markets.
Each of these can be managed actively, where decisions to buy and sell are outsourced to a manager.
Under these circumstances the fund manager actively seeks to deliver an improved investment experience for the client.
The alternative is a passively managed product, where the investment seeks to mimic the exposure to an index.
Mr Hambro said: “The best way to gain access to this sector is somewhat dependent upon the asset size of investment by the client, liquidity requirements, risk tolerance levels and sentiment towards paying a higher fee for active management, versus a lower fee for passive management.
“A typical retail investor can gain access to commodity markets through daily traded products such as Ucits equity funds that provide exposure to the producers of commodities or futures funds that track the Dow Jones UBS Futures index or the S&P GSCI Commodities Futures index.”
