What caught my eye this week.

Considering the high hurdle that politicians and business leaders have set themselves for something to be considered a sacking offence, I was surprised to see the boss of National Savings & Investments (NS&I) resign this week.

Of course, the NS&I FUBAR was a rough experience for the 37,500 people affected. NS&I’s mistakes saw bereaved families facing delays accessing their relatives’ Premium Bonds with a total value of up to £476m.

To give just one example from a BBC report:

Tracy McGuire-Brown from Newbury in Berkshire […] took six years to claim £2,000 in premium bonds her late father had left in his will.

The 61-year-old former care home manager says she “cannot describe how upsetting and frustrating” it was to deal with NS&I, and that she had to send in her father’s will and other original documents at her own expense.

“It was the most awful, awful experience,” she says.

No doubt – and not what anyone wants to deal with in the wake of the death of a loved one.

However, NS&I has more than 24 million customers holding £240bn with the institution, so the number affected is relatively small. According to Which the problems were caused by administrative failures – bad, certainly, but not malicious. The long delay between problems emerging and NS&I coming clean is problematic, but again the scale of the operation mitigates this to some extent.

With all that said – and, again, not to make light of having to fight to get your own money back – I think the real reason boss Dax Harkins had to go was because NS&I is held to a higher standard than a typical High Street bank, on the basis of its 100% government backing.

Trust buster

I’ve often recommended NS&I savings or Premium Bonds to fretful – but essentially financially uninterested – friends and relatives looking for somewhere safe to put their cash. Especially after the financial crisis.

No worries about bank runs with NS&I, or Financial Services Compensation Scheme limits, or your savings somehow getting muddled up in riskier lending. Just okay interest rates, the infinitesimal chance to win big with ERNIE, and a recommendation made in the same vein as nobody getting fired for buying IBM.

Also, faith in NS&I’s systems underwrites the Premium Bond draw.

There are already conspiracies about which Bonds win and who gets what prizes. NS&I can do without incompetence creeping into the mix, too.

Further reading:

• A terse apology from National Savings & Investments – NS&I
• NS&I boss replaced as savers left waiting for millions of pounds – BBC
• What caused the missing NS&I savings, and what you should do – Guardian
• Another take on the scandal and next steps if you’re affected – Which
• NS&I will have to pay compensation in some cases, say ministers – This Is Money

Have a great weekend.

[continue reading…]

This was to be a Mavens member post explaining how commodities work in a portfolio and why that time is now. But given how fast events are moving, we’ve pulled it forward to give non-members a taste of what’s behind our paywall. Please do consider signing up for more!

Is it me or are the 1970s back? Apparently Claudia Winkleman was spotted in flares, plus there’s an oil crisis inbound. (You might have noticed?)

Personally I can’t wait to queue around the block for petrol and use candles for lighting again. 

But while it’s a bad time to be the owner of an ICE ¹ car – or a leader of Iran – it’s an excellent time to be a commodities investor. 

The vertical take-off vehicle in the chart below is the sight of a natural gas ETC ² going up like an interceptor – once the missiles started flying. See the light blue line:

Chart from justETF. March 2026. justETF charts show nominal total returns (GBP).

The gas futures tracker is 92% to the good since 2 March (the first day of trading after the war began).

It’s as if people think bombing gas fields is gonna put up the cost of energy or something.

Whizzing along at a slightly lower altitude is Wisdom Tree’s Brent Crude Oil ETC (yellow line, 54% gain).

Finally, UC15 – my fave broad commodities ETF – flies under the radar with an 11% gain (green line).

Run for cover

The next chart contrasts the response of equities, gold, bonds, money market, and commodities to the current crisis:

Yes, every other asset class is retreating like a Dubai-domiciled influencer bar docile cash (orange blip) and the aforementioned commodities (the investment that loves it when physical stuff gets scarce). 

But don’t worry, this is not a “Commodities Ra-Ra!” post. 

The point is that DIY investors are naturally sceptical about commodities. The asset class is sickeningly volatile and many recall how it fell into a doom spiral after the Global Financial Crisis. 

Yet the counterpoint is that commodities are often upstanding – and sometimes outstanding – when other asset classes hide under the table. 

Especially during the supply shock crises that wrack the world periodically. Which – unless Trump steps off his golden escalator soon – is exactly what the current contretemps could trigger. 

Hopefully sanity will prevail. But it can take a while before the hard-of-sanity see sense.

That’s why commodities deserve another look. Especially given how other assets struggle to cope with highly inflationary conditions. Gold may perform but it’s a highly unreliable bedfellow (as its current 12% drop-off since 2 March is currently reminding us…)

Commodities: the good, the bad, and the downright ugly

I’m not a stooge in the pocket of ‘Big Raw Materials’ who pay me in bushels of wheat for every new convert. Honest!

What follows is intended as a relatively quick and digestible account of the reasons why you might want to hold commodities as a strategic diversifier. It includes reasons why you might skip it as well.

Just so you know where I’m coming from, I don’t advocate dipping in and out of Brent Crude ETCs depending on how histrionic Pete Hegseth appears today. 

However, I do hold a broad commodities ETF (Ticker: UC15) as a portfolio diversifier and bulwark against inflationary shocks. 

BCOM again

Now, about that commodities bear market…

The commodities index I benchmark against (BCOM) has still not recovered the market high it achieved in June 2008. 

From that perspective, the asset class has spent almost 18 years underwater! That’s absolutely hideous if you were sucked in by the Noughties’ run-up in commodities. (An ascent often attributed to the rapid growth of China and other emerging economies at the time.) 

However commodities look perfectly respectable from other starting points. 

For instance, here’s the annualised returns over the past ten years for the main asset class ETFs I charted earlier in the article:

Asset class	10-yr annualised return (%)
Gold	14.6
World equities	12.9
Broad commodities	10.1
Money market	2
Global government bonds	0.3

Nominal annualised total returns (GBP) from justETF, 20 March 2016-20 March 2026. I’ve replaced iShares Global Government Bond ETF (IGLH) with XGSG because IGLH does not have a ten year track record. Both are GBP hedged.

On this view, commodities don’t look so bad. In fact, they’ve done extraordinarily well during a period in which gold and equities have been blinding. 

Moreover, they’ve produced a great result for a diversifying asset. There’s not much point holding raw materials to deflect rogue waves of inflation if it’s a deadweight the rest of the time. 

(Reminder: for real returns, subtract average UK inflation of about 3.5% for the period.) 

Commodities for the long run

The long-term real return of broad commodities stacks up nicely, too:

Data from AQR ³, Summerhaven ⁴, BCOM TR, MSCI, Before the Cult of Equity ⁵, A Century of UK Economic Trends ⁶, Robert Shiller, The Big Bang ⁷, Bank of England, and ONS. March 2026. Monevator sourced returns in this article are inflation-adjusted annualised total returns (GBP).

World equities index – Pre-1970 World equities monthly returns are not available in the public domain. To facilitate long-term comparisons, I’ve used market-cap weighted UK and US monthly returns to stand in for World equities from 1900 to 1970. The MSCI World equities index covers the period from 1970 until the present day. The UK / US market cap varied from approximately 55% to 84% of World equities up to 1970.

The long-run view shows that commodities are not a basket case. Indeed, their average return is more than fine (and compares favourably with other defensive diversifiers):

• Broad commodities (blue line in chart above): 4.6% annualised real total return (GBP)
• World equities (red line): 5.9% annualised real total return (GBP)

My chart annotations spotlight commodities’ handy habit of peaking when inflation runs amok. Unsurprisingly really, because they’re the feedstock of the price index itself.

As such, the historical record shows that raw materials are the asset class most likely to beat inflation when it’s eating your purchasing power alive.

Two caveats though.

Firstly there are some enormous bears lurking in the commodities return undergrowth. We’ll wince at those shortly.

Secondly, the chart’s biggest commodity booms are associated with the early Twentieth Century industrialisation of the US (see 1900 to 1909 on the chart) and the double-hit of post-war inflation and reconstruction (1945 to 1950).

If you don’t think the transition to a decarbonised economy built around the electric tech stack will have quite the same impact, then we should discount commodities’ long-run average growth rate.

For example, fund manager Research Affiliates’ offers 3.1% as its 10-year real expected GBP return for commodities.

Either way, on balance I think it’s reasonable to believe commodities can make a positive contribution to the growth of a diversified portfolio.

Material gain

For my money, the real win isn’t the future return of commodities. It’s the damage limitation role they can play when equity performance is grim.

The next chart contrasts World equities and commodities returns during the biggest stock market routs of the past 126 years:

On average, commodities outperformed equities by 46.1% per bear. Remember that’s an inflation-adjusted return, too.

As you can see, commodities didn’t always produce a positive return. However, they did deliver a better return than equities. Every time.

The table below offers a quick summary of the action above:

Diversification score card

Equity bear market performance	World equities	Commodities
Positive return	0	4
Better negative return	0	5
Best overall return	0	9

Pretty compelling, eh? The table is telling us that commodities always improved portfolio performance when investors desperately needed a life belt to cling onto.

Indeed I think I should write up a post repeating this score card for the other key portfolio diversifiers available to us – and that can also be tested against a diverse range of economic conditions. Namely, cash / money market funds, government bonds, and gold.

Without checking, however, I bet the others will struggle to do as well as commodities. Simply because runaway inflation is the spark most likely to torch UK investors’ portfolios.

This is at odds with the US downside experience, which is dominated by demand-led recessions like the Great Depression.

That’s partly why commodities have been given short shrift. They don’t thrive when demand collapses.

You can see in the chart above that the clamour for copper and cows evaporates during Big League liquidity crises. Witness commodities’ negative returns booked against the Global Financial Crisis, the Japanese asset bubble implosion, and the slump-daddy of them all, the Great Depression.

Thankfully, government bonds usually ride to the rescue during those times of darkness.

But commodities were deemed unnecessary when DIY investing took off because memories of rampant inflation had faded. And Americans hadn’t suffered purchasing power cuts on the scale that scarred previous generations of Brits either.

Totally oresome

The next chart gives you the gory details on how often commodities have stepped up when equities have fallen down:

The red ravines represent the occasions that equities fell from their previous high – including the death plunges we saw in the previous chart.

The icy peaks show the subsequent rolling one-year commodity real returns.

Blue swells that rise above the 0% line show commodities actively counterbalancing equity drops with a positive return over the next 12-months.

But if the blue line tunnels down, then it exacerbates the situation if it bores through the red floor.

Otherwise, negative commodity returns reduce the drag factor so long as the blue losses don’t exceed the red.

The higher and more frequently the blue waves rise above the red depths, the better.

Once again, this is a sterling result, but the chart also warns us that commodities don’t always hedge your losses.

The hard stuff

As grizzled commodities investors know, this is an asset class that can batter you with devastating combos of negative returns.

The next chart retells the commodities growth story, but it highlights the warts ‘n’ all:

Obviously the angry red areas are the down years – or decades.

Not so bad? Not so fast!

The chart is based off softie nominal prices, because that best represents our lived experience as investors.

However, the next chart shows the real deal – because it’s inflation-adjusted returns that put food on the table:

Oh my! This is the ugly I mentioned earlier.

By this light, the history of commodities returns is dominated by nearly four double lost-decades. ⁸

In other words, commodities sunk deep underwater for around 80 of the last 126 years. So there’s that.

Shovel it

If the boom and bust nature of commodities puts you off for life, I don’t blame you.

Reader, I invested. Not because I love pain but because commodities can bulk up when equities and bonds wane.

My target asset allocation is 10%. However I only bought 5% initially, my plan being to take advantage of raw materials’ inherent volatility in the future.

That is:

• I’ll buy more when my commodity ETF plummets.
• I’ll sell when the ETF’s price rockets.

Hopefully that rebalancing schedule will enable me to turn a profit on my commodities exposure. Or at least recover more rapidly when the next equities’ bear strikes.

Super psyched

Incidentally, the mighty leg-ups on the commodities’ growth chart led to the development of the commodities ‘super-cycle’ theory.

The theory posits that commodities go on a tear during periodic transformations of the world economy. Whereas the subsequent slumps are the product of over-investment in solving commodity bottlenecks.

If that pattern holds then we’re still on the upswing from the depths of the last commodities’ depression. It began when easy money dried up during the Global Financial Crisis.

It’s a macroeconomic story arc that could help explain the excellent 10-year returns we saw for commodities earlier, and Research Affiliates’ chipper 10-year expected returns forecast too.

But what matters to me is that there’s something in my portfolio that reacts to inflation like Popeye on spinach.

When that happens I’ll sell up and buy breathing space for my equities to recover.

Take it steady,

The Accumulator

P.S. For more on commodities, check out our five-part series:

• Part one explained how commodities investing works
• Part two covered commodities’ long-run returns
• Part three examined whether commodities enhanced portfolio returns
• Part four investigated whether commodities really are a good inflation hedge for UK investors. [Members post]
• Part five delved into my ‘best commodities ETF‘ picks

P.P.S. “What follows is intended as a relatively quick and digestible account…” Yes, I failed. Again.

1. Internal combustion engine[↩]
2. Exchange Traded Commodity fund[↩]
3. Levine, Ooi, Richardson, Sasseville. 2018. “Commodities for the Long Run.” FAJ.[↩]
4. Bhardwaj, Janardanan G, Rajkumar, Geert Rouwenhorst K. 2020. “The First Commodity Futures Index of 1933.” Journal of Commodity Markets. 2020.[↩]
5. Campbell G, Grossman R, Turner JD. 2021. “Before the cult of equity: the British stock market, 1829–1929.” European Review of Economic History. 25. 10.1093/ereh/heab003.[↩]
6. Chadha J, Rincon-Aznar A, Srinivasan S, Thomas R. “A Century of UK Economic Trends.” ESCoE, NIESR and Bank of England.[↩]
7. Kuvshinov D, Zimmermann K. 2021. “The Big Bang: Stock Market Capitalization in the Long Run.” Journal of Financial Economics, Forthcoming.[↩]
8. During my research I discovered that a ‘vicennium’ is the noun for 20 year spans. But I’m relegating this knowledge to the footnotes, because anyone who bandies around words like vicennium needs to have a word with themselves.[↩]