Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>There is a clear distinction between the returns of nominal and real asset classes following a peak in US headline inflation.</li>
<li>The 1,2,3,6, and 12-month returns for both US Equities and Treasuries are positive and, more importantly, above the average returns measured over the entire sample period.</li>
<li>The returns on Commodities following a peak in US inflation are negative for all five holding periods, while Gold is somewhat of a mixed bag caused by elevated return volatility. </li>
</ul>


There is a clear distinction between the returns of nominal and real asset classes following a peak in US headline inflation.
The 1,2,3,6, and 12-month returns for both US Equities and Treasuries are positive and, more importantly, above the average returns measured over the entire sample period.
The returns on Commodities following a peak in US inflation are negative for all five holding periods, while Gold is somewhat of a mixed bag caused by elevated return volatility. 


When Inflation Peaks, Favor Nominal over Real Assets: The Multi-Asset Evidence

Data-Driven Commodity Research, The Commodity Report

The Commodity Report

Data-Driven Commodity Research

A unique newsletter about commodities and macro analysis in a weekly format.

Commodities

<ul>
<li>Besides global growth concerns as Central Banks step up their battle against inflation, and China's zero-covid restrictions may stretch into 2023, it is quite clear what the main story was this week</li>
<li>Russia cut up to 60% of its gas flows to Germany. It will become very hard for Europe to get over the next winter if gas flows remain that low</li>
<li>Rate hiking cycles end when the Fed Funds target rate catches up to where the 2-year T-Note yield has already gone</li>
</ul>


Besides global growth concerns as Central Banks step up their battle against inflation, and China's zero-covid restrictions may stretch into 2023, it is quite clear what the main story was this week
Russia cut up to 60% of its gas flows to Germany. It will become very hard for Europe to get over the next winter if gas flows remain that low
Rate hiking cycles end when the Fed Funds target rate catches up to where the 2-year T-Note yield has already gone


The Commodity Report: CRB Commodity Index Ended the Week 5.1% Lower

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

As we predicted in June 2020, US CPI inflation has jumped at the start of 2Q 2021, the headline rising to 4.2% YoY (a 12-year high) and the core-CPI inflation rate rising to 3% YoY (the highest in 25 years).  Although FOMC members insist inflation is "transitory", there are shortages of chips, ships, and many resources globally. Despite some seeming slack in the US labour market, it is proving difficult to move workers from sectors with surplus labour (eg, hospitality and aviation) to other sectors of the economy, and this friction is contributing to higher inflation. We believe the FOMC will have to cut back on the size of its asset purchases (thereby slowing M2 growth from its currently torrid 21% YoY pace), and will be obliged to raise the Fed Funds rate by 12.5bp by the July FOMC meeting.  Inflation is also rising because the economy is operating near full-capacity after the massive fiscal stimulus (over 10% of GDP) passed by March 2021. President Biden has proposed US$4.1 trillion of additional spending on Infrastructure and Families over the next 8-10 years, to be financed by tax increases (a higher corporate tax rate of 28%, higher personal income tax rates for those with over US$1 million of annual income, and a near-doubling in the capital-gains tax rate for the richest). The tax increases are designed to pay for the increased spending over 15 years, implying that there will an additional fiscal stimulus since the spending will be more front-end-loaded than taxes. This ambitious fiscal agenda, however, is only likely to be partially enacted, given that the Democrats have only 4 seats more than the half-way mark in the House, and exactly half the Senate (implying a big role for Vice President Harris's casting vote). Anything opposed by one of the 3 relatively conservative Democratic Senators (Manchin, Kelly and Sinema) or the Blue Dog coalition of centrist Democrats in the House (numbering 19 members). Truly ambitious spending aimed at creating permanent entitlements (e.g., the "green" and tech-intensive elements of Biden's Infrastructure Plan, and some elements of his Families plan that don't hit at "reparations") could pass with 60 Senate votes (at least 10 Republicans). But the size of the total spending will need to be cut back to about US$1 trillion (out of US$4.1 trillion) with commensurate compromises on taxes (corporate tax of 25%, capital gains tax rate hiked to less than a 30% peak with loopholes). Even using the Budgeting process to pass tax and spending through "reconciliation" (bypassing the need for 60 Senate votes, settling for 51) will have limited utility. While we expect a smaller package to get done, it will be less inflationary than the full Biden package. But inflation will nonetheless remain a factor all through 2021. We recommend being Underweight equities, with the allocation focused on mineral (including gold) companies, steel producers, plantation companies and industrial cyclicals that benefit from growth and inflation.

As we predicted in June 2020, US CPI inflation has jumped at the start of 2Q 2021, the headline rising to 4.2% YoY (a 12-year high) and the core-CPI inflation rate rising to 3% YoY (the highest in 25 years).  Although FOMC members insist inflation is "transitory", there are shortages of chips, ships, and many resources globally. Despite some seeming slack in the US labour market, it is proving difficult to move workers from sectors with surplus labour (eg, hospitality and aviation) to other sectors of the economy, and this friction is contributing to higher inflation. We believe the FOMC will have to cut back on the size of its asset purchases (thereby slowing M2 growth from its currently torrid 21% YoY pace), and will be obliged to raise the Fed Funds rate by 12.5bp by the July FOMC meeting.  Inflation is also rising because the economy is operating near full-capacity after the massive fiscal stimulus (over 10% of GDP) passed by March 2021. President Biden has proposed US$4.1 trillion of additional spending on Infrastructure and Families over the next 8-10 years, to be financed by tax increases (a higher corporate tax rate of 28%, higher personal income tax rates for those with over US$1 million of annual income, and a near-doubling in the capital-gains tax rate for the richest). The tax increases are designed to pay for the increased spending over 15 years, implying that there will an additional fiscal stimulus since the spending will be more front-end-loaded than taxes. This ambitious fiscal agenda, however, is only likely to be partially enacted, given that the Democrats have only 4 seats more than the half-way mark in the House, and exactly half the Senate (implying a big role for Vice President Harris's casting vote). Anything opposed by one of the 3 relatively conservative Democratic Senators (Manchin, Kelly and Sinema) or the Blue Dog coalition of centrist Democrats in the House (numbering 19 members). Truly ambitious spending aimed at creating permanent entitlements (e.g., the "green" and tech-intensive elements of Biden's Infrastructure Plan, and some elements of his Families plan that don't hit at "reparations") could pass with 60 Senate votes (at least 10 Republicans). But the size of the total spending will need to be cut back to about US$1 trillion (out of US$4.1 trillion) with commensurate compromises on taxes (corporate tax of 25%, capital gains tax rate hiked to less than a 30% peak with loopholes). Even using the Budgeting process to pass tax and spending through "reconciliation" (bypassing the need for 60 Senate votes, settling for 51) will have limited utility. While we expect a smaller package to get done, it will be less inflationary than the full Biden package. But inflation will nonetheless remain a factor all through 2021. We recommend being Underweight equities, with the allocation focused on mineral (including gold) companies, steel producers, plantation companies and industrial cyclicals that benefit from growth and inflation. 

Biden's "Socialist" Remake of the US: How Much Will Be Too Much for the Blue Dogs?

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>The S&amp;P GSCI (GSG) and Bloomberg Commodity Index (BCOM ETF) are the two key benchmarks for commodity investing, but both track futures contracts, not spot prices.</li>
<li>Over 10 years, spot oil, copper, and gold rose strongly, yet these indices delivered flat to negative returns due to roll yield drag, rebalancing, and higher fees.</li>
<li>They work best as tactical inflation hedges — GSCI for high-beta oil exposure, BCOM for more diversified commodity exposure — not as long-term compounding assets.</li>
</ul>


The S&amp;P GSCI (GSG) and Bloomberg Commodity Index (BCOM ETF) are the two key benchmarks for commodity investing, but both track futures contracts, not spot prices.
Over 10 years, spot oil, copper, and gold rose strongly, yet these indices delivered flat to negative returns due to roll yield drag, rebalancing, and higher fees.
They work best as tactical inflation hedges — GSCI for high-beta oil exposure, BCOM for more diversified commodity exposure — not as long-term compounding assets.


Understanding Commodity Indices: S&P GSCI (GSG) Vs Bloomberg Commodity Index (BCOM ETF)

<ul>
<li>Commodity trends remain bifurcated: gold, copper, and uranium are surging, while iron ore, and coal struggle under oversupply and weak demand.</li>
<li>Top picks: <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24628:1" rel="noopener">Zijin Mining Group (601899 CH)</a><a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-4527fb98-bb5d-4d74-91fe-66f9c0224eb3" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining (1787 HK)</a><a href="https://www.smartkarma.com/entities/jsw-steel-ltd" target="_blank" data-smartkarma-citation="entities:18561:1" rel="noopener">JSW Steel Ltd (JSTL IN)</a>, <a href="https://www.smartkarma.com/entities/lloyds-metals-energy-ltd" target="_blank" data-smartkarma-citation="entities:15467:1" rel="noopener">Lloyds Metals &amp; Energy (LYDM IN)</a> , <a href="https://www.smartkarma.com/entities/paladin-energy-ltd" target="_blank" data-smartkarma-citation="entities:10117:1" rel="noopener">Paladin Energy (PDN AU)</a> </li>
<li>Top shorts: <a href="https://www.smartkarma.com/entities/hindalco-industries-ltd" target="_blank" data-smartkarma-citation="entities:18490:1" rel="noopener">Hindalco Industries (HNDL IN)</a> , <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a><a href="https://www.smartkarma.com/entities/coal-india-ltd" target="_blank" data-smartkarma-citation="entities:9117:1" rel="noopener">Coal India Ltd (COAL IN)</a><a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN)</a> </li>
</ul>


Commodity trends remain bifurcated: gold, copper, and uranium are surging, while iron ore, and coal struggle under oversupply and weak demand.
Top picks: Zijin Mining Group (601899 CH)Shandong Gold Mining (1787 HK)JSW Steel Ltd (JSTL IN), Lloyds Metals &amp; Energy (LYDM IN) , Paladin Energy (PDN AU) 
Top shorts: Hindalco Industries (HNDL IN) , Nippon Steel Corporation (5401 JP)Coal India Ltd (COAL IN)Tata Steel Ltd (TATA IN) 


Global Metals & Mining Playbook – July 2025

Dow Jones Commodity Index (DJCI INDEX)

When Inflation Peaks, Favor Nominal over Real Assets: The Multi-Asset Evidence

Empirical data since 1970 reveals that US Equities and Treasuries perform well after a peak in inflation, while Commodities and Gold lag.

Jeroen Blokland

The Commodity Report: CRB Commodity Index Ended the Week 5.1% Lower

Besides global growth concerns as Central Banks step up their battle against inflation, and China's zero-covid restrictions may stretch into 2023,...

The Commodity Report

Biden's "Socialist" Remake of the US: How Much Will Be Too Much for the Blue Dogs?

Blue Dog moderate Democrats hold the voting key & will ensure a Biden-lite tax & spending agenda eventually gets through Congress. Inflation will...

Prasenjit K. Basu

Understanding Commodity Indices: S&P GSCI (GSG) Vs Bloomberg Commodity Index (BCOM ETF)

Key commodity indices like S&P GSCI and Bloomberg Commodity Index track futures contracts, not spot prices, leading to flat to negative returns...

Rahul Jain

Global Metals & Mining Playbook – July 2025

Commodity trends show gold, copper, and uranium surging, while iron ore and coal struggle. Top picks include Zijin Mining Group, Shandong Gold...

Rahul Jain

When Inflation Peaks, Favor Nominal over Real Assets: The Multi-Asset Evidence

Empirical data since 1970 reveals that US Equities and Treasuries perform well after a peak in inflation, while Commodities and Gold lag.

Jeroen Blokland

The Commodity Report: CRB Commodity Index Ended the Week 5.1% Lower

Besides global growth concerns as Central Banks step up their battle against inflation, and China's zero-covid restrictions may stretch into 2023,...

The Commodity Report

Biden's "Socialist" Remake of the US: How Much Will Be Too Much for the Blue Dogs?

Blue Dog moderate Democrats hold the voting key & will ensure a Biden-lite tax & spending agenda eventually gets through Congress. Inflation will...

Prasenjit K. Basu

Understanding Commodity Indices: S&P GSCI (GSG) Vs Bloomberg Commodity Index (BCOM ETF)

​Key commodity indices like S&P GSCI and Bloomberg Commodity Index track futures contracts, not spot prices, leading to flat to negative returns...

Rahul Jain

Global Metals & Mining Playbook – July 2025

​Commodity trends show gold, copper, and uranium surging, while iron ore and coal struggle. Top picks include Zijin Mining Group, Shandong Gold...

Rahul Jain

Key commodity indices like S&P GSCI and Bloomberg Commodity Index track futures contracts, not spot prices, leading to flat to negative returns...

Commodity trends show gold, copper, and uranium surging, while iron ore and coal struggle. Top picks include Zijin Mining Group, Shandong Gold...