Who knew that stuff like corn, coffee, oil or gold could be packaged up and traded? That’s what a commodity is really.

Commodities video image
Video transcript

Commodities are raw materials that are packaged up into standardised bulk amounts and traded on specialised exchanges.

These materials can include agricultural products like wheat, corn and coffee; or industrial products such as iron ore, copper or oil.

Because they are bulky, physical products which can be difficult to access directly, professional fund managers will trade specialised contracts that represent the commodities.

But any investor can gain access through actively managed funds or passive funds, known as Exchange Traded Commodities or ETCs