Today’s investors seek higher returns with

controlled risk. During periods when

traditional investments struggle, commodities

as an alternative asset class might just provide

one effective solution to this quest. Although alternative

asset classes held in isolation often carry undesirable

risk, when held inside a disciplined and diversified

portfolio of traditional assets, commodities may offer the

opportunity to both mitigate risk and increase returns.

This paper explains the unique benefits of commodities.

The stage is set as follows:

Prelude Although you may think that commodities markets are complex, you are already involved and know more than you may think. At some time, you have left your air-conditioned or heated home, gotten into your auto with its tank of gasoline, and gone to the grocery store to shop. You participated as an end user in the commodities markets’ three major categories: energy (natural gas, heating oil, gasoline); metals (the metals in your auto and even your gold and silver jewelry); and agricultural products (the items in your shopping cart). Producers and manufacturers handle raw materials to supply your needs and appeal to your desires. Those raw materials need to move through distribution channels to the marketplace in an orderly fashion so that manufacturers can keep their businesses running, the consumers happy, and the economy humming.

Those raw materials, called “commodities” in the investment world, make up an asset class, just as stocks or bonds or real estate make up an asset class.

Asset classes are investment tools that individually serve a particular purpose (provide a return for a given level of risk). When added together, the asset classes work to make a portfolio grow over time. If a house was assembled with poor tools and inappropriate materials (for example, plastic hammers, warped lumber, stripped screws or poorly mixed concrete), the house would quickly collapse. Just as a solid house requires proper tools and materials, a good portfolio needs the right mix of assets. The usual asset classes contained within most investors’ portfolios include cash, fixed income securities (bonds), equities (stocks), and real estate. When considering alternative asset classes, most investors think of hedge funds; however, less well-known alternative asset classes include private equity and commodities. Private equity and other alternatives largely remain in the realm of institutional assets.

The Script Act 1

Commodities as an Asset Class

Act 2 New Research on Commodity Returns

Act 3 Diversification Benefits of Commodities

Act 4 Inflation Effects on Commodities and Other Asset Classes

Act 5Optimal Incorporation of Commodities Into

Traditional Portfolios

Curtain Call...

SAVANT

COMMODITIES: A New Tool In The Portfolio Toolbox

In the past, a private investor’s portfolio, with the usual asset classes—cash, bonds, stocks, and real

estate—could be mixed to create a relatively diversified portfolio for any given level of risk. Today, a new tool in

the portfolio toolbox—commodity assets—is available and accessible to the private investor. Commodity assets can be

purchased via commodity index funds.

Commodities respond to market conditions differently than all other asset classes, and therefore, belong in a

diversified portfolio. With commodities in the allocation, the portfolio has a better probability of reaching its growth

objective with more controlled risk. An investor receives added value from an increase in portfolio return, or a decrease

in portfolio risk, or from a combination of higher return and lower risk.

Commodities as an Asset Class

A basic definition is helpful in understanding portfolio construction. Assets are used to build portfolios. An asset is “a valuable item that is owned.” In the financial world, stocks, such as General Electric Co. and Citigroup Inc., are examples of assets. Combinations of similar assets, with similar characteristics, form asset classes. The U.S. Large Cap Equity asset class includes General Electric Co., Citigroup Inc., and all other publicly traded U.S. large stocks.

Without doubt, crude oil is an asset. It is valuable in many aspects of our lives. Crude oil is part of the commodity asset class. “Commodity” is a generic term describing assets with physical form. In contrast, stocks do not have physical form. They instead represent legal ownership in a company and its profits. Corn, cattle, gold and heating oil are further examples of commodities. Why should commodities be considered an asset class? Despite varying production locations (corn is grown and gold is mined in many places around the globe), commodities can be interchanged and traded freely. Commodity assets are bound by common regulations, are managed with specific risk management techniques and are collectively different from intangible (such as

stocks) asset classes. Thus, commodities are a unique asset class.

Long ago, before markets developed, commodities, such as corn and sheep, traded hands directly from farmer to manufacturer (baker and butcher.) The trading process evolved and became more efficient over time as market participants created futures contracts. The producers (for example, farmers and miners) would enter into an agreement to sell

(for a given price), at a date in the future, a stated amount of a product. For example, a silver miner might agree to sell 50,000 troy ounces in 3 months to a manufacturer for an agreed upon dollar amount. That is a futures contract. Later, centralized trading using futures contracts developed for most of the world’s commercial commodities. In fact, Chicago, IL is now home to two major exchanges—the Chicago Board of Trade and the Chicago Mercantile Exchange.

In recent years, exchanges have further evolved as index providers—companies such as Dow Jones & Company and Goldman Sachs Group Inc.—assemble commodity benchmark indexes to track various commodities. For example, Dow Jones designed a commodity index called DJ-AIG Commodity Index, which includes crude oil derivatives, agricultural products and metal components. Figure 1 illustrates the full index components. The index is based on a diversified group of commodities weighted to reflect liquidity and world production.

Commodities fall into three major sub-categories: agricultural products, metals (industrial and precious), and energy. In the case of the DJ-AIG Commodity Index, construction rules ensure diversification since no single commodity or category of commodities can constitute more than 33% of the index. This and other similar indexes provide a benchmark by which investors can monitor the asset class. Commodity strategies based on such indexes are long-term, buy-and-hold strategies.

As mentioned earlier, private investors now have the ability to invest in commodities via mutual funds. These funds are based on commodities

2.

Figure 1: DJ-AIG Commodity Index Components* January 2006

12% Natural Gas 13% Crude Oil 4% Unleaded Gas 4% Heating Oil

5% Wheat 6% Corn 8% Soybeans 3% Soybean Oil 6% Live Cattle 4% Lean Hogs 3% Sugar 3% Cotton 2% Coffee

7% Aluminum 6% Copper 3% Zinc 3% Nickel 6% Gold 2% Silver

Energy

Agriculture

Metals

* Index components may be divided into sub-components: not illustrated above

Act 1

3.

indexes like the one in Figure 1. Several years ago, few options existed. Now, new commodity-based investment vehicles are becoming available. As the number of options has grown, costs continue to decline, making the asset class even more appealing. Until recently, investing in commodities required either active involvement or participation in managed futures programs often costing several percentage points per year. Now, private investors can own commodity index funds for a modest management fee. The increases of trading volume and liquidity have been instrumental in lowering cost of ownership.

New Research on Commodity Returns

Interestingly, the earliest noteworthy academic commodity research was published by John Maynard Keynes in 1930. Additional theories of expected return and risk languished for many years until the subject became the focus of many researchers during the 1990s. Recently, several new studies have been published. (Study titles can be found at the end of this paper.) The studies ask a common question: “What is the expected return from a commodity index investment?” Though a variety of theories has formed, there is still no single best estimate of expected return from commodity futures. With that said, one reliable source of expected return is that derived from underlying collateral. A closer look at a futures contract will explain.

A futures contract has two structural parts: the cash investment and the futures contract. The underlying collateral is the cash investment. The second structural part, an investment in commodity futures, requires only a very small amount of cash. One can buy $100,000 exposure (potential return and risk) of the future with, perhaps, $4,000 initial margin. In practical terms, an investor starting with $100,000 would give $4,000 to a third party as a “down payment,” which is akin to good faith arrangement. (The third party is the intermediary between buyers and sellers ensuring that both parties uphold their financial obligations.) Then, the investor buys a futures contract which costs nothing since it is a promise to pay in the future. Finally, the remaining $96,000 is invested in a cash investment. The most conservative cash investment would be a U.S. Treasury Bill. The Treasury Bills’ collateral (interest) return is a primary source of expected return. However, commodity index funds typically invest their collateral in higher-yielding, fixed income securities. Historically, such fixed income exposure offers investors a 5-6% return per year.

The second structural return component of a futures contract is from the price change of the futures contract. After the purchase of a futures

contract, the contract’s price can rise, stay the same or fall. If the price falls and the investor sells the contract, the investor must pay to the clearing house the price difference, which is a loss. If the price remains the same, no cash exchanges hands. If the price rises and the investor sells the contract, the clearing house pays the investor the difference between the purchase and sale price, constituting a gain.

In addition to the combined return from the cash investment and from the individual contracts purchased by the commodity fund, another source of expected return is from the rebalancing within the commodities index itself. A commodity index is composed of many different types of commodities futures such as gold, silver and aluminum. Each commodity represents a portion of the index. For example, copper is 6% of the DJ-AIG index. If copper prices rise, copper will represent a larger share of the index. As a result, the overweight portion will be sold to return to a 6% weightings. The result is a dollar gain from the sale. The gain is reinvested in commodities that have fallen from the assigned index weight. This is rebalancing: a systematic, long-term opportunity for investors to buy low and sell high. This process of selling appreciated commodities and purchasing undervalued commodities adds value because it reduces risk and increases return. Since more than 20 different commodities are now contained in the index, and since the returns of those commodities are relatively unrelated (for example, the supply and the demand factors driving soybeans and gold prices are uncorrelated), rebalancing opportunities are rich. Historically, rebalancing has added approximately 2-3% in annual return. The gain from rebalancing makes sense when you consider that heating oil return patterns vary from those of corn.

Finally, a more debated—and less certain—component of prospective commodity returns is called “insurance premium” (also known as “roll return”). In years past, “natural” suppliers (sellers) of commodities risk (that is, farmers and mining companies) have outnumbered “natural” buyers of commodities risk (that is, manufacturers and speculators). For example, once their fields are planted, to assure they make reasonable profits and are not wiped out by falling prices, farmers often lock in current corn and soybean prices, assuring a profit for their hard work. This “insures” that they can afford to feed their families and purchase seed corn for the next growing season. Since more farmers have historically preferred to reduce commodity risk than manufacturers and speculators have desired to absorb the risks inherent to commodities, the sellers of risk (farmers) traditionally

Act 2

COMMODITIES: A New Tool In The Portfolio Toolbox4.

have needed to pay an “extra amount” to investors and speculators to absorb the risk of fluctuating

prices. In times past, investors in commodities served a function similar to what insurance companies do for homeowners. Just as an insurance company, for the

cost of an insurance premium (that covers their overall risk of loss AND an “extra amount” for their profit) will

insure your house against a devastating fire or natural disaster, producers of commodities historically have been

willing to pay investors in commodities an “extra amount” to assume the short-term risk related to commodity price

changes. This “insurance premium” historically benefited investors. The continuation of this “insurance return” is

currently being debated and remains uncertain. As markets continue developing and as more investors actually desire the

diversification benefits of commodities, the “extra amount” that producers need to pay for investors to absorb commodity risk

may decline or even approach zero. Because of its uncertainty, we view any future “insurance premium” as a bonus return. Even

though this component of return may become unavailable, the extremely robust diversification benefit and other more reliable

expected returns (i.e., collateral of 5-6% and rebalancing return of 2-3% per year) offered by commodities still make a strong case for ownership.

Diversification Benefits of Commodities

The addition of commodities to a portfolio of asset classes can contribute to investor returns in two other ways: 1) commodities’ low correlation to other asset classes, and 2) commodities’ direct relationship to inflation.

Commodities have a low correlation to other asset classes. “Correlation” is a statistical term that describes the relationship between two investments’ rise or fall. For example, if two investments rise together or fall together in an identical pattern, the correlation is positive 1.0. They are behaving exactly alike. However, if one

investment falls the exact amount that another rises, the correlation is -1.0. They are behaving exactly the opposite. Although impossible, the ultimate (100% diversified) portfolio would be composed of two investments with a correlation of -1.0. Why? If asset A rose while asset B fell, the portfolio would have no risk. While both investments would grow over time at their long-term expected rates, 100% of the short-term losses along the way would be offset by the other investments’

short-term gains. The portfolio would not risk losing money since the assets move oppositely; balancing losses against gains. Though this ideal diversification is unachievable, the next best thing is for your portfolio to contain assets that have low or negative correlations to reduce risk and potentially increase return. For example, a farmer has two farms in separate counties where one farm has soybeans while the other grows corn. Assume that one year, the corn farm has a bumper season while the other farm has an average crop. The farmer’s income is saved because of his crop diversification. You, also, would not want all your assets to rise together or to fall together. Yes, you might get rich if they all rose, but you could also be completely poor if they all declined. You would not want to take that risk. Commodity futures indexes offer this advantage of negative correlation to most traditional asset classes. Commodities act very differently than do traditional asset classes such as stocks and bonds.

That basketful of groceries you bought some time ago might make the point more simply. For example, items brought home from the store become vastly more valuable if unexpected inflation occurs. In contrast, most stock prices will fall due to a squeeze on profits caused by rising commodity costs, increased pressure on labor costs, and expectations of decrease in economic activity. You can not eat a piece of paper; and if that piece of paper claiming a share of a company’s profits (a stock certificate) is plagued with falling profits, then tangible assets like the meat in your freezer (a commodity) will be worth more. You cannot replace that meat for the price you originally paid if inflation makes your currency less valuable. Commodities (or steak in the freezer) can protect part of your portfolio from ravages by unexpected inflation.

Market history offers statistical proof of the benefits of commodity diversification. For example, the Goldman Sachs (GS) Commodity Index and the S&P 500 (U.S. Large Cap stocks) exhibited low correlation of -0.3 for the period between 1/1973 and 6/2006. The Lehman Brothers Government/Credit Bond Index has a correlation with the Commodity Index of -0.1. Commodities, stocks, and bonds react to market conditions differently! In fact, their returns historically are unrelated. In other words, commodities often “zig” while stocks, bonds, and real estate “zag.”

Figure 2 illustrates two pairings of different asset classes. The right side shows mostly positive correlations and the left side demonstrates negative correlations. Figure 2 highlights the relationship between the GS Commodity Index, and various other asset classes. The right margin lists the S&P 500’s relationship to GS Commodities, U.S. Small Stock, MSCI EAFE (international large company developed stocks) and other asset classes. The S&P 500 is positively correlated

Act 3

5.

Figure 2: Commodity Correlations with other Asset Classes is Low(Correlations 1/1973 - 6/2006)

+1

-1

NoDiversification

Benefit

PerfectDiversification

Benefit

Most Asset Classes Correlation to the

S&P are High

S&P 500GS Commodities

0.8 US Small Stock0.7 MSCI EAFE0.6 Int’l Small Stocks0.6 Equity REITs

0.3 LB Gov’t / Corps Bond

LB Gov’t / Corp Bond -0.1Int’l Small Stocks -0.1

US Small Stock -0.2MSCI EAFE -0.2

S&P 500 -0.3

Equity REITs -0.2 -0.3 GS Commodities

Traditional Asset Classes Have Negative Correlations

to Commodities

with U.S. Small Stock (0.8) and the MSCI EAFE (0.7). In plain English, most of the time when the S&P 500 moves up in price, the U.S. Small Stock will move up too. The same principle applies on the down side. In other words, these asset classes act much the same. In contrast, the left side of Figure 2 illustrates the correlations between the GS Commodity Index and other asset classes. Each of the correlations is negative. For example, the Commodity Index has a negative correlation relative to the S&P 500 of -0.3.

Putting statistics aside for a moment, Figure 3 illustrates the diversification benefits of commodities relative to stocks and bonds in a manner not requiring a statistics degree. The graph compares the returns of commodities with stocks and bonds over various market cycles. Between 1973 and 1981, the GS Commodity Index outperformed stocks and bonds by 7.5% or more per year. However, between 1991 and 2001, the commodity index lagged stocks by 13.1% and bonds by 6.8% per year. Although the short-term trends vary, commodities often move in directions opposite from stocks and bonds (a negative correlation), leaving the portfolio in its entirety more stable. In addition to reducing short-term risk, portfolios as a whole perform better in the long-term when they contain assets with low correlations.

5.1% 5.2%

12.8%

1973 - 1981

18.0%19.9%

8.0%

1982 - 1986

8.0%

11.9%

30.0%

1987 - 1990

4.6% 4.1%

22.3%

2002 - 2006

8.1%

14.4%

1.3%

1991 - 2001

U.S. Equity (S&P 500)Commodity Index (Goldman Sachs) Fixed Income (Lehman Brothers Int. G/C)

Figure 3: Commodity Index, Fixed Income, and U.S. Equity (Annual Returns 1/1973 - 6/2006)

COMMODITIES: A New Tool In The Portfolio Toolbox6.

Inflation Effects on Commodities and Other Asset Classes

Unexpected inflation is generally harmful to equities and fixed income. (Unexpected inflation is the difference

between “expected” inflation and “actual” inflation— what the market anticipated versus what actually happened.)

While investors have come to expect modest inflation over time (approximately 3%), stocks and bond prices often

plummet when worse-than-expected inflation indicators appear. The price decline occurs because unexpected inflation

undermines purchasing power and ruins both corporate and personal budgets.

The harmful effect of inflation on equities can be evident in a personal budget. Unexpected inflation reduces the purchasing

power of intangible investment assets and often lowers the return potential. For example, in times of low expected (and actual) inflation,

a $300,000 investment account could be liquidated to purchase a new home. However, in periods of rampant change in inflation, or

unexpected inflation, it is likely that the value of the investment account drops while the home price rises. The $300,000 account may drop to $250,000 while the cost of the home goes up to $350,000. The home might become unaffordable. Since interest rates are generally high during such periods, borrowing the extra $100,000 might not be feasible. Unexpected inflation has ruined their personal budget.

In contrast to the behavior of intangible investment assets like stocks and bonds, many commodities react positively to unexpected inflation. Gold and other precious metals rise in economically turbulent times when inflation is quickly increasing. Energy products, livestock and industrial metals also act like gold. A recent study by Erb and Harvey (2006) found that the GS Commodity Index had a positive relationship to unexpected and actual inflation. “Positive” here means that commodities rise in tandem with unexpected and actual inflation. With such behavior, commodities play a defensive role in portfolios. In periods when inflation unexpectedly rises, commodity returns often mitigate some of the fall in stock and bond returns.

Optimal Incorporation of Commodities into Traditional Portfolios

Model Portfolios without and with Commodities

In the past, commodities were treated like second class citizens in the investment world. We believe one reason for their questionable

reputation is that many people have failed to understand commodities as an asset class. Very little quality historical data and research on the asset class have existed until recently. Furthermore, the media focused on broadly-held stock and bond markets, which left less coverage for alternative investments. This focus is changing. As investors have the ability to purchase non-traditional asset classes, the media is now beginning to educate the public. This education encourages investors to add commodities to their portfolio toolbox. The asset class diversification benefits result in both higher long-term returns and lower short-term risk. To illustrate the portfolio benefit of commodities, Figure 4 compares two balanced portfolio strategies. The model portfolio on the top does not include commodities while the model portfolio on the bottom does include a modest 3% allocation.

Adding an asset class like commodities to a traditional portfolio makes sense if the change passes one of two tests: 1) if the asset adds return to the portfolio while keeping portfolio risk unchanged, or 2) if the asset maintains the original portfolio return, while lowering portfolio risk. If an asset class passes either test, it adds value. Figure 5 compares the risk/return test results for each of the balanced portfolios shown in Figure 4. The annualized portfolio return without commodities is 12.1% between 1/1973 and 6/2006. The standard deviation, a measure of volatility risk, is 11.6%. In contrast, the portfolio with commodities earned a higher 12.2% return per year with a lower risk (standard deviation) of 11.2%.

Figure 4: Balanced Model Portfolios Without and With Commodities

3.0% GS Commodity

60/40 Without Commodities

60/40 With 3% Commodities

4.2% Emerging Markets 6.4% Int’l Small Stocks 3.7% MSCI EAFE Value 2.7% MSCI EAFE

13.9% I/T Bonds 13.8% S/T Bonds 9.3% Inflation Protected Bonds

3.0% Equity REITs

8.8% U.S. Small Value Stocks 6.8% U.S. Small Stocks 11.7% U.S. Large Value Stocks 12.7% S&P 500

9.0% U.S. Small Value Stocks 7.0% U.S. Small Stocks 12.0% U.S. Large Value Stocks 13.0% S&P 500

4.0% Emerging Markets 6.5% Int’l Small Stocks 3.75% MSCI EAFE Value 2.75% MSCI EAFE

3.0% Equity REITs

14.75% I/T Bonds14.75% S/T Bonds 9.5% Inflation Protected Bonds

Act 4

Act 5

7.

Commodities added value by passing both tests, a feat rare for any asset class: they increased returns by 0.1% and lowered risk by 0.4%. Even better, the portfolio with commodities declined less than the portfolio without commodities when protection was most needed—during nasty bear markets! The right side of Figure 5 illustrates that the maximum decline (worst multi-year loss) for the portfolio with commodities is “less bad,” -17.7%, than the portfolio without commodities, -19.5%. Said differently, the portfolio with commodities fell less during the worst bear market in the last 33 years (1973-74).

How to Invest in Commodities

Adding commodities to a portfolio enhances return, reduces risk and protects investors from devastating, unexpected inflation. Though in the past, individual commodities acquired a reputation as a “speculative” investment, in reality, when owned as part of a broadly diversified portfolio, they are not speculative but actually risk reducing. Conventional wisdom is not always correct!

In fact, today’s investors can use index-based mutual funds to gain diversified exposure to commodities. Like a simple futures contract, index-based commodities mutual funds contain two structural parts. First, the mutual fund gains commodity exposure by entering an agreement with a counterparty—usually a major financial institution. The counterparty agrees to provide to the mutual fund the return of the published commodity index minus a small fee. Funds are exchanged between your mutual fund and the financial institution in an amount dependent upon the relative performance of the agreed-upon commodities index. For example, if after the mutual fund enters an agreement and the price of the DJ-AIG Commodity Index increases by 10%, then the third party will pay the mutual fund 10% (minus a small fee.) The transaction between the mutual fund company and the third party requires only a small flow of cash from the mutual fund to the third party. For example, in a $100,000 investment the mutual fund company gives to the third party approximately $30,000 of the

cash investment. The mutual fund company invests the remaining $70,000 of the $100,000. Thus, the second structural part is the mutual fund company investment. The mutual fund typically purchases a portfolio of bonds with the remaining cash. The fund company earns a return on the bonds. Thus, the index-based mutual fund total return comes from (1) the return on the commodities index and (2) the total return earned on the bonds (less fund expenses and a fee paid to the third party).

What Traditional Asset Class Should Commodities Replace?

Still, one question remains: Which traditional asset classes should commodities replace in a diversified portfolio? Although commodities do act differently from stocks, bonds and real estate, Savant believes commodities should replace a portion of the bond investment for several reasons. First, commodities offer risk reduction and, second, the commodities funds’ underlying collateral is invested in bonds. Both the commodities funds and the investor’s bonds are preservation assets, thus being reasonable substitutes and complimentary. Furthermore, although commodities have traditionally earned stock-like returns, Savant anticipates the expected long-term return on commodities of 6-8% annually to be closer to that of bonds than of stocks.

We applied this logic in engineering the 60/40 Model Portfolio with 3% commodities illustrated in Figure 4. We reduced the historical allotment of bonds from 40% to 37% and added 3% to commodities. The remaining 60% of the portfolio continues to own equity and real estate. The new portfolio structure contains only a small allocation to commodities, reflecting our belief that commodities are like a spice. It takes only a small pinch of spice to make food taste better. Likewise, it takes only a small amount of commodities to enhance a portfolio’s risk/return characteristics. Although some research makes a case for larger commodities exposure, we believe a conservative approach is more prudent. We would prefer to put your proverbial foot into the bath water slowly! While we plan to monitor this asset class and its allocation over time, possibly increasing our exposure as time passes, we believe for most investors a 3% initial allocation in commodities is a good first step to building a better, more broadly diversified portfolio.

We also believe a slightly smaller 2% allocation to commodities makes sense for most 100% equity investors eventhough currently there are no bonds to be replaced in such a portfolio. In this case, the commodities draw proportionately from equities. Although commodities may earn slightly less than equities, we believe their strong diversification benefits will provide a long-term boost to 100% equity investors.

Figure 5: Risk/Return Benefit of Commodities within a Portfolio

12.1%

11.2%

12.2%

Annual Returns

60/40 with 3% Commodity 60/40 without Commodity

Risk (Std. Dev.)

Maximum Loss(1973 - 1981)

11.6%

-17.7%

-19.5%

Disclosure and Sources of Information

Besant, Lloyd and the Chicago Board of Trade, “Commodity Trading Manual,” 1982.

Erb, Claude and Campbell, Harvey, “The Strategic and Tactical Value of Commodity Futures,” Financial Analysts Journal, Vol. 62, #2, March/April 2006.

Dow Jones & Company, djindexes.com.

Gorton, Gary and Rouwenhorst, K. Geert, “Facts and Fantasies about Commodity Futures,” Financial Analysts Journal, Vol. 62, #2, March/April 2006.

Savant Capital Management, Internal Research

Savant Capital Management is a Registered Investment Advisor. Savant’s marketing material should not be construed by any existing or prospective client as a guarantee that they will experience a certain level of results if they engage the advisor’s services and includes rankings published by magazines which are generally based exclusively on information prepared and submitted by the recognized advisor. Past performance is no guarantee of future results.

Savant Capital Management is a fee-only wealth management firm, committed to helping individuals preserve their hard-earned capital, and pursue steady, wise growth. For over 25 years, our team of professionals has provided specialized financial planning, disciplined investment management, and integrated wealth management in order to help clients working toward maximizing their assets, enhancing the quality of their lives, and realizing personal and financial goals.

With over $3 billion under management, Savant develops and implements strategies based on proven and unwavering planning and investment philosophies. Acting as a fiduciary advisor, Savant’s philosophy is based on time-tested principles and common sense.

Savant has consistently received local and national recognition. For the past six years Savant has been named by Barron’s magazine as one of the 100 Best Independent Financial Advisors in the United States. In addition, Savant has earned a place on the Bloomberg/Wealth Manager/AdvisorOne “Top Dog” list for the past 10 years. Our hard work and commitment to provide the best service and value to clients has also earned us recognition by publications including InvestmentNews (one of the 50 Largest Wealth Management Firms in the Nation), Financial Advisor magazine (A Top-Growing Independent RIA), BusinessWeek (Most Experienced RIA List), Forbes (Top 50 Registered Investment Advisor), and The Washingtonian (Top Money Advisors List).

The newest tool in the portfolio toolbox is commodities. Private

investors can now easily and affordably access this important

asset class via an index (passive) investment. Commodity index

funds offer the potential for higher portfolio returns with less risk.

When commodities are added to broadly diversified portfolios

of stocks, bonds, and real estate, Savant believes the re-tooled

portfolio is more efficient, diverse and stronger than before.

SAVANT

Curtain Call...

“Synopsis on Commodities”

Savant Capital Management

866 489 0500 savantcapital.com