Traditional Investments

One of the main benefits of commodities is that they are negatively correlated with financial assets and the value of the US dollar as most commodities are internationally denominated in USD and therefore commodities as a powerful portfolio diversifier. Additionally, commodities are positively correlated with inflation.

In the development of commodities ideas, we look at the shape of the futures curve, the liquidity/spreads level, the cost curves and inventories levels and the supply risk premium to either exploit interesting investment returns or hedge against inflation in a portfolio context.