The asset class has risen 35% in euro terms over the past 12 months, justifying the overweight position that Robeco took in commodities for its multi-asset portfolio this time last year.
That overweight will now be continued due to a combination of positive factors for commodities as the world returns to normality following the pandemic, says Van der Welle, strategist with the multi-asset team.
“Deploying our asset allocation framework factors of macroeconomic developments, momentum, valuation and sentiment, we conclude that commodities in general – and metals in particular – have become anything but rusty,” he says. “Instead, commodities still shine, and continue to warrant a portfolio overweight in the near to medium term.”
“The momentum effect, where price returns follow previous price performance, can be seen everywhere in the multi-asset space. Commodity markets have been no exception: they are clearly enjoying strong and positive momentum at this juncture, seeing the strongest price gains on short one-month momentum across the multi-asset universe.”
“Strong short-term momentum gains such as those observed in metals such as copper and aluminum likely signal further price gains in the near future.”