By Brad Zigler

Professional portfolio managers learn very early in their careers the fundamentals of hedging. If there's a need to tactically reduce exposure to a particular asset class, they learn to find contrary investments, something that "zigs" as other holdings "zag."

Major indexes barely stayed in the green on Wednesday, as conflicting economic reports kept the market in a seesaw pattern for most of the day. The S&P 500 finished ahead by five points while oil closed just under $82/ bbl. The Commerce Department said that wholesale inventories fell 0.2% in January after dropping 1% in December. Companies’ sales rose 1.3%, the tenth straight gain. The drop in inventories and the rise in sales suggests that companies may soon have to begin restocking. However, news was not as good on the employment front with the government reporting that unemployment rose in 30 states in January and that five states are currently at record levels of unemployment.

The ETFdb 60 added 2.49 points, or 0.2%, to close at 1,043.93. The ETFdb 60 is now up 1% on the year.

It’s difficult to put a finger on the exact cause of the recent surge in popularity of commodity investing. More than likely, the boom is attributable to a number of different factors. Correlation between international equity markets (and even between stocks and bonds) has surged in recent years, increasing both the importance and difficulty of adding non-correlated assets to investor portfolios.

Given the relatively weak correlation with other asset classes, commodities have found a home in many investors’ portfolios. Moreover, unprecedented injections of liquidity into the financial system have created anxiety over a coming uptick in inflation that could erode returns to stocks and fixed income instruments. Commodities have historically served as an effective inflation hedge, and many are once again turning to natural resources to protect assets from a surge in the CPI.