Royal London's Trevor Greetham is positioning for a commodity supercycle, holding £4bn in commodities as he anticipates major economies overheating in the next two years. His portfolio allocation of 5% across metals, energy, and agricultural assets reflects growing institutional confidence in commodities as inflation hedges and portfolio diversifiers.

Commodities have gained traction amid concerns about an AI-driven technology bubble and heavy government borrowing. The Bloomberg Commodity Index has rallied 18% in six months, outperforming both world equities and bonds. This surge coincides with a declining dollar, which has historically moved counter to commodity indices since 2000, making raw materials cheaper for non-dollar economies.

Investors face a choice between pure commodities and commodity producer equities. While broad commodity indices like BCOM offer diversification, their performance suffers from futures rollover costs. Natural resource equity funds have historically outperformed underlying commodities, with copper miners benefiting from AI-related power demand. The key question for investors remains timeframe—commodities serve as effective short-term inflation hedges but require patience for long-term gains.