Should I Buy Commodities?

I currently have around £4,200 sitting as cash in my S&S ISA which I'm looking to re-allocate and now seems a pretty good time to do it. My portfolio doesn't hold any commodity shares directly, only via the exposure I have via my general equity funds, so this is an area I could potentially use for a little further diversification.

In addition some of the bloggers I read are currently buying commodities - or waiting for the funds so that they can do so, so this does seem to be where the sensible (and knowledgeable) money is going at this point in time. However I'm anything but knowledgeable regarding this kind of asset and I know I shouldn't be buying anything I don't understand. The main question I have being why are the stocks currently so cheap and what is likely to have an influence on their price in the future.

So I did a little research and  reading which was more than a little depressing about the current state of the global economy and the part played by the price of the raw materials needed to build growth, but which did suggest that buying now would quite likely be a good move. That's so long as growth does pick up next year and doesn't halt completely, in which case no-one would be needing the raw materials needed to build, or make anything. However the WTO is cautiously forecasting a rebound next year which gave me the confidence I needed to think about this further.

So what to buy? I was tempted by Billlton as the research done by other bloggers is very convincing (thanks especially to FI UK on Financial Independance UK and Huw on Financially Free by 40)  but I haven't yet taken the plunge and bought any shares in individual companies and I'm not sure that doing so is the way I want to go at the moment, so I decided to look for a more general access point. Following up a comment made by diy Investor UK on Huw's post (thanks again) I took a look at a couple of investment funds - Blackrock Commodities Income with a yield of  7.25%, trading at premium to NAV of 4.9, charges 1.08% and BlackRock World Mining which is trading at a discount to nav of -7.55% with a yield of 7.20% and charges of 1.42% (and which incidentally has almost 10% invested in Billiton).

What about the passive choice of a tracker/ETF? I did find a Global DB-X tracker  available at 0.45% charges inside my ISA on Interactive Investor which might do the job - far less volatility than the Investment Trusts and with lower charges but 0% dividend yield and it hasn't done at all well when compared to the sector over the last 3 years. I'm afraid I wasn't tempted.

My decision - I'm going to take a risk and go with the Blackrock Mining Investment Trust. My reasoning being that it is trading at a good discount, the fund managers have been around for a long time and so have a lot of experience in the area and, although it has had a bad year, according to MoneyObserver and  some other sources, this blip is due to a particular set of circumstances and is not likely to be terminal. The high charges are a bit of a downer, but I have also read that they may be reduced in an attempt to lure investors back in and the yield at 7.20% does a fair bit to offset them.

Decision made. I've just bought £1,500. Let's see how things go.