Spreading out the Risk: Commodities as Portfolio Diversifiers (#1/4)

Presented by

Daniel Stoianov, NTree International

About this talk

Commodity prices are the primary source of input cost inflation. When these costs are low, typically this means that there is more margin for a company to pay interest and retain earnings. Therefore, stocks and bonds are most sensitive to rising and falling commodity prices. Within a portfolio context, having assets with low or inverse linear relationships is the key to diversification. Can an allocation in commodities improve diversification efforts within a portfolio? Professional investors can expect to gain an insight into correlations between traditional assets and certain commodities in order to enhance diversfication benefits, while simultaneously obtaining an understanding of the relationship between commodities and traditional asset valuations.
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NTree’s goal is to educate European investors on the investment opportunities in the Chinese and Commodities markets. As the Chinese economy continues to grow at breakneck pace and China remains at the forefront in innovation in high-tech sectors, the investment case for China is stronger than ever. Meanwhile, world market volatility further highlights the necessity for European investors to consider adding Commodities to their portfolios both for diversification, and for momentum. We believe that both phenomena are inextricably linked, and present unique opportunities to the discerning investor - we intend to support investors in uncovering those opportunities.