Commodities are basic resources and agricultural products such as iron ore, crude oil, coal, sugar, coffee beans, copper, wheat, gold and silver. One of the big advantages of investing in a basket of commodities is that they generally offer protection against the effects of inflation.

Few asset classes benefit from rising inflation, but commodities usually do, as the demand for goods and services drives a corresponding rise in the price of goods, leading to a rise in the price of the commodities used to produce them.

It’s hard to refute the long-term case for natural resources, which stems from the long-term demand and prodigious urbanisation in emerging markets, with infrastructure spending expected to almost triple over the next seven years.

The prolific expansion of emerging economies is coupled with supply shortages and the escalating cost of extracting good quality raw materials. So certain companies will be well placed to benefit from the continuing supply and demand disparities, which indicate a long-term support for commodity prices.

We believe the long-term expansion of emerging economies will continue to drive a long-term growth trend for commodities, and a great way of gaining exposure to this market is through a well diversified commodity fund, with my pick for 2011 being the JPM Natural Resources Fund.

The fund benefits from a management team that draws on insights you can only get from experience.  Ian Henderson has amassed considerable industry knowledge during his 35 years' commodity investment experience and Stuart Connell offers additional unique insights gained from his training as a geologist.

Standard Initial Charge.........5.25%

Thomas Heal Discount..........5.25%

JPM Natural Resources Fund

The JPM Natural Resources Fund has demonstrated a strong long-term track record over ten years. This success is largely down to the vast experience of fund manager Ian Henderson and a unique approach which advocates buying into companies at an early stage of exploration to maximise profit growth potential*.

The fund is suitable for those for investors willing to accept some additional risk, in exchange for the potential of exciting returns, the diversification benefits of a different asset class and the hedge provided against inflation.