2011 was an unusual year for commodities and hard assets investing. Normally, the prices of commodities and hard assets producers' equities move in parallel. Yet, in almost every sector, equities significantly underperformed commodities last year. For example, gold bullion increased 10.1 percent in 2011 while the NYSE Arca Gold Miners Index returned -15.5 percent. Crude oil prices rose 8.38% while the Energy Select Sector Index returned 1.4%. A broad basket of commodities, the S&P GSCI Index returned -1.2 percent while the broad Rogers Van Eck Hard Assets Producer Index returned -12.5 percent.

During 2011, Consumer Price Index Inflation increased 3 percent. But the cost of the energy component was up 6.6%, gasoline increase 9.9 percent, and fuel oil was up a whopping 18 percent. Meanwhile, the U.S. Federal Reserve pledged in January to keep interest rates near zero at least through 2014, signaling even more inflationary pressure ahead.

What's a good strategy for clients who want to hedge against higher inflation, especially in commodities and energy? Producer stocks look cheap relative to commodities, and it's not hard to allocate them to portfolios via index funds. Market Vectors, PowerShares and State Street Global offer hard asset equity ETF choices you can help clients evaluate.