It is fashionable to apply physics to investing. One axiom that looks relevant to investment in commodities is Heisenberg’s uncertainty principle. It holds that the act of locating a particle in space makes its momentum uncertain, while an attempt to measure its momentum renders its location uncertain. It is perhaps the most famous example of the observer effect – that by observing something, we interact with it and run the risk that we change it.

Has just this happened to investment in commodity futures? A growing body of academic research shows that commodities can be great diversifiers in a portfolio.