Commodities Beat Tech This Decade, and Wall Street Still Won't Buy In
India Targets Five Small Modular Reactors by 2033 CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and… The best performing asset class of this decade is also the most under owned.
Since October 2020, when we first called for a decades-long super-cycle in commodities, the broad commodity indices like the S&P GSCI are up 200 per cent; gold 140 per cent.
This year commodities are up 37 per cent with petroleum up 81 per cent.
The bottlenecks rotated – gold, copper, silver, coffee, cocoa, oil and most recently diesel.
In contrast, crypto indices are up 157 per cent, the Nasdaq 145 per cent and the S&P 500 117 per cent.
By investor returns, hard assets have beaten technology.
You would never know it by what investors hold.
Energy and basic materials represent less than six per cent of the S&P 500, less than a third of its long run weight.
During the first part of this decade institutional investors used sustainability as a reason to dissolve real-asset sleeves, yet poured money into green energy that required vast amounts of raw materials like copper.
Six years on, superior returns have produced little reallocation.
Performance is supposed to attract capital, but it hasn't.
What makes this even more remarkable is what the capital chased: the artificial intelligence buildout, the largest commodity short in history.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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