European Investors have a new way to hedge against rising inflation risk, as UK-based investment firm WisdomTree launches a new broad-based commodity exchange-traded ETF. WisdomTree takes a bullish position on commodities including gold and silver. It seems that the investment firm is optimistic about the gold price. For details of the news cryptocoin.com keep reading.
“Rate hike does not prevent gold price and commodities from rallying“
Nitesh Shah, head of commodities and macroeconomic research for European funds at WisdomTree, says commodities remain an attractive investment and hedge against inflation:
Sudden increases in energy prices, increases in food prices due to drought, and transit bottlenecks, for example, directly feed commodity prices and consumption baskets from which inflation figures are calculated. It’s not just these short-term phenomena that drive commodity prices. An infrastructure renaissance combined with an energy transition could provide a supercycle in certain commodities for the next decade.
The company says the new fund leverages precious metals through physical duplication of gold and silver. At the same time, total return trade-offs are used to drive performance for energy, agricultural and industrial metal components.
WisdomTree takes a rather bullish position on commodities, including gold and silver. WisdomTree head of equity strategy, Jeff Weniger, says in a recent interview that he advises investors to move away from bonds and hold more commodities in 2022.
A balanced portfolio should be 60% stocks, 30% bonds and 10% commodities.
Jeff Weniger states that increasing inflation pressures will keep the Fed behind the inflation curve that will support commodity prices next year:
Let’s say there will be four rate hikes next year. This does not prevent commodities from rallying. If your money is worth something like 1% and inflation is hovering at 3% or 4%, it’s still a very coherent monetary policy.
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