February 2022 will be remembered for the Russian invasion of the Ukraine. Both countries are important producers of agricultural commodities and Russia is also an important producer of oil and gas. The prices of most commodities reacted immediately whilst both equity and bond markets around the globe sold off on the news.  The price of precious metals also reacted positively and provided much-needed stability in our portfolios.

It is evident from the above illustration that commodity exposure provides diversification value along with rand weakness against the USD. This underlines our view that balance within a portfolio is a prerequisite for true diversification. We were also remined that diversification is only tested in times of market turmoil, as that is when it is needed most.