From Indexuniverse.com: Commodities, which fall within the broad category of hard assets, are an interesting class from a portfolio perspective. Since 1970, they have provided relatively high returns, exhibited negative correlations with equities and bonds, and acted as a hedge against event risk.
As stated earlier, the attribute of negative correlation makes an asset class an excellent diversifier of risk. Thus, commodities appear to be worthy of consideration for inclusion in a globally diversified portfolio. We base the analysis in this chapter on evidence accumulated since 1970 on the S&P GSCI-perhaps the most commonly cited commodities index….. Full Article: Source