The Interesting Case of Commodities, Inflation, and Carry
10 March 2021
Commodities strategies are very interesting to monitor as risks for a higher inflation environment are back on the agenda of most investors. Our update shines some light on the compelling connection between commodities, inflation, and carry, with a specific focus on the THEAM Quant – Raw Materials Income fund and the BNP Paribas Easy Energy & Metals Enhanced Roll ETF.
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STRATEGY REMINDER - THEAM Quant Raw Material Income
- The fund aims at generating a sustained income over the medium term by exploiting the outperformance of a positioning on maturities further along the forward curve vs a positioning on front-month contracts.
- The long leg is a curve-enhanced portfolio whose positioning is determined by the S&P GSCI® Dynamic Roll methodology (which optimises the roll yield of commodity indices).
- The short leg is a short position on the benchmark index.
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The investments in the funds are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the funds described being at risk of capital loss.
For a complete description and definition of risks, please consult the last available prospectus and KIID of the funds.
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