Natural resources offering inflation hedge
Funds focused on natural resources are among the best-performing funds over the past year as investors seek out protection in a rising inflation environment.
Over one year to 31 May, 2021, Terra Capital Natural Resources returned 130%, Tribeca Global Natural Resources returned 112% and Ausbil Global Resources returned 85%.
This was double the returns of the best-performing Australian equity fund, Sandon Capital Activist, which returned 57% over the same period.
Within FE Analytics’ Australian Core Strategies universe, the commodity and energy sector returned 30.8% over the period.
Commodities performed well in an environment of rising inflation and were seen as a way to ‘inflation-proof’ portfolios as the price of commodities such as oil and copper rose when inflation was accelerating.
The only commodity funds which lost money were gold funds with Perth Mint Gold losing 4.4% and VanEck Vectors Gold Miners ETF losing 2.2%.
In a recent report from Amundi, the firm said gold tended to operate in reverse to other types of commodities.
“On one front, being a safe haven, a positive economic environment is not supportive for gold. Yet, negative real interest rates with higher inflation have helped gold prices recover initial losses in the year and could further prolong this trend,” it said.
AUTHOR
Laura Dew
Recommended for you
Record flows into iShares ETFs helped BlackRock’s assets under management reach US$13.5 trillion in the third quarter, but it reported outflows from the APAC region.
Regal Partners has passed $20 billion in funds under management, helped by $723 million in net inflows during the last three months.
Global investment manager Fidante has formed a strategic partnership with a London-based asset manager to secure exclusive distribution rights across the APAC region.
Blackwattle Investment Partners has hired a management trio from First Sentier Investors – who departed amid the closure of four investment teams last year – to run its first equity income offering.
