Commodities: The Game-Changer in Strategic Asset Allocation for the New Decade
By
👤Schroders
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Schroders, in their report "Commodities: A Structural Allocation for the Next Decade?" explores the heightened relevance of commodities in the changing economic landscape. Noting that commodities emerged as one of the few winners in 2022 amidst widespread asset value declines, they ask if these should play a more strategic role in multi-asset portfolios. The end of the post-global financial crisis era, characterized by loose monetary policy and low, steady inflation, has paved the way for an expected return to more typical inflation patterns.
The New Regime: Learning from History for Future Investments
Speculating that the future may hold higher, more persistent inflation, Schroders refers to the 1968-1994 period, during which inflation was mostly above 3%, as a potential reference point for the emerging financial environment. They draw parallels between the recent inflationary spell of 2022 and past inflation trends, believing that these historical insights can prove useful for commodities in the prospective regime. In this context, the paper discusses how to integrate commodities into a Strategic Asset Allocation (SAA), as we approach a financial climate unseen in over three decades.
Interested in understanding how commodities might shape your portfolio strategy in the next decade? Click "Report" to explore Schroders' compelling insights on the strategic role of commodities in the face of changing inflation dynamics.
By
👤Schroders
