Natural-Resource Equities Could Provide Better Inflation Hedge than Commodities, According to The Boston Company Asset Management

Natural-Resource Equities Could Provide Better Inflation Hedge than Commodities, According to The Boston Company Asset Management

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE BNY Mellon

BNY Mellon Investment Boutique Sees Rates Rising

NEW YORK, May 7, 2014 /PRNewswire/ -- Natural-resource equities could provide a better hedge against inflation than commodities themselves, according to a white paper from The Boston Company Asset Management, LLC (TBCAM), the Boston-based equity investment boutique of BNY Mellon.

This could be a particularly appropriate time to consider strategies that hedge against a rise in inflation as interest rates appear to have bottomed, the report said.  It notes that an increase in the federal funds rate could come as early as the spring of 2015, which could spark a rise in inflation.

TBCAM warns that investors may wish to prepare for inflation despite concerns from the International Monetary Fund and U.S. Federal Reserve that inflation is too low. Such concerns may prompt central banks to add even more stimulus through quantitative easing and negative real rates, said Robin Wehbe, author of the report and portfolio manager for TBCAM.

"Preparing for the eventual transformation of stimulus into excess liquidity is paramount," Wehbe said.  The report, Inflation Investment Guide: The Advantage of Natural-Resource Equities Allocation, posits that natural-resource equities may provide inflation-hedging benefits without significantly reducing the performance of an investment portfolio in pre-inflationary time periods. Equities, natural resource equities and commodities perform differently across different inflation regimes, the report said. 

"In times of low to moderate inflation, equities typically are the clear outperformer," said Wehbe.  "However, natural-resource equities have historically caught up and eventually overtaken the broader stock market to turn in the best returns as inflation begins to rise.   Commodities tend to lag all equities in almost every inflationary environment, only outperforming the broad market in times of very high inflation."

Rising U.S. interest rates contribute to a strengthening U.S. dollar and could drive inflationary pressures around the world, the report said.   Countries with current account deficits will feel these pressures the most, according to TBCAM. The report notes that concerns about inflation have been blamed for the sell-off in emerging markets over the last year.

"It's important to remember that commodities have an expected return of zero," said Wehbe.  "If you look at the historical return of commodities against other asset classes, such as equities, you'll see that they have significantly underperformed."

The report is available at TBCAM's web site:
http://www.thebostoncompany.com/assets/pdf/views-insights/April14_Views_Insights_Inflation_Investment_Guide.pdf

Notes to Editors:

The Boston Company Asset Management, LLC, a BNY Mellon Investment Management boutique, provides active equity investment-management services for corporate, public, mutual funds and union sponsored and jointly trusteed retirement plans, endowments and foundations.  Assets are managed by The Boston Company as well as its personnel acting as dual officers of either The Dreyfus Corporation or The Bank of New York Mellon.

BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.6 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of March 31, 2014, BNY Mellon had $27.9 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.

All information source BNY Mellon as of March 31, 2014. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Investment Management to members of the financial press and media and the information contained herein should not be construed as investment advice.  Past performance is not a guide to future performance.  A BNY Mellon Company.                                                

Contact: Mike Dunn
+1 212 922 7859
mike.g.dunn@bnymellon.com

 

©2012 PR Newswire. All Rights Reserved.

  • Most Popular StoriesMost Popular StoriesMore>>

  • Yuma Shooting Victim Identified; Vigil Held

    Yuma Shooting Victim Identified; Vigil Held

    YUMA - Friends and family gathered outside Jimmie Dee's bar Sunday night to say goodbye to Frank Salazar, Jr. Yuma police are confirming the identification of the 28-year-old shooting victim, who diedMore >>
    YUMA - Friends and family gathered outside Jimmie Dee's bar Sunday night to say goodbye to Frank Salazar, Jr. Yuma police are confirming the identification of the 28-year-old shooting victim, who died outside the local bar early Friday morning.More >>
  • Coming soon...Wal-Mart

    Coming soon...Wal-Mart

    On Wednesday the Yuma City Council voted to change the zoning designation on the proposed land acquired by Wal-Mart. The property located near the intersection of Avenue B and 8th Street was the home of a mobile home park as zones for residential use; the new designation changes that to mixed which will allow the new store to move in to the property. The new store will be the fifth Wal-Mart for Yuma County.More >>
    On Wednesday the Yuma City Council voted to change the zoning designation on the proposed land acquired by Wal-Mart. The property located near the intersection of Avenue B and 8th Street was the home of a mobile home park as zones for residential use; the new designation changes that to mixed which will allow the new store to move in to the property. The new store will be the fifth Wal-Mart for Yuma County.More >>
  • Out with the old...

    Out with the old...

    It has been a staple in the Yuma community since the early 70's and the place to meet for the young and old alike. The Southgate Mall now sits on broken asphalt and bares the scares of more than 40 years; decades being passed from owner to owner and now it's set to be torn down to make way for a new more improved shopping center. Today the building has been stripped from within to make way for demolition equipment to tear down the center portion of the mall. Stores like Sear, Burlington and t...More >>
    It has been a staple in the Yuma community since the early 70's and the place to meet for the young and old alike. The Southgate Mall now sits on broken asphalt and bares the scares of more than 40 years; decades being passed from owner to owner and now it's set to be torn down to make way for a new more improved shopping center. Today the building has been stripped from within to make way for demolition equipment to tear down the center portion of the mall. Stores like Sear, Burlington and t...More >>
  • California firm issues nationwide fruit recall

    California firm issues nationwide fruit recall

    A Central California company has issued a voluntary nationwide recall of specific lots of its fresh peaches, plums, nectarines and pluots over concerns of possible listeria contamination.More >>
    A Central California company has issued a voluntary nationwide recall of specific lots of its fresh peaches, plums, nectarines and pluots over concerns of possible listeria contamination.More >>
  • Woman arrested to allegedly smuggling drugs into Calipatria State Prison

    Woman arrested to allegedly smuggling drugs into Calipatria State Prison

    CALIPATRIA, CA - A woman visiting an inmate at a local prison winds up behind bars herself for trying to smuggle in drugs. Calipatria State Prison officials say 25-year-old Veronica Delgado was visitingMore >>
    CALIPATRIA, CA - A woman visiting an inmate at a local prison winds up behind bars herself for trying to smuggle in drugs. Calipatria State Prison officials say 25-year-old Veronica Delgado was visiting an inmate in facility C yesterday, when an officer noticed something in her mouth. More >>
  • National

    Obama warns of delay in social sec. checks and veteran's benefits

    Obama warns of delay in social sec. checks and veteran's benefits

    Web Producer: Lucy Valencia, Assignment Desk Editor WASHINGTON (AP) -- Declaring "we are not a deadbeat nation," President Obama warned on Monday that Social Security checks and veterans' benefits willMore >>
    Declaring "we are not a deadbeat nation," President Obama warned on Monday that Social Security checks and veterans' benefits will be delayed if congressional Republicans fail to increase the government's borrowing authority in a looming showdown over the nation's debt and spending.More >>
  • Officials: Rebar spikes placed on forest roads

    Officials: Rebar spikes placed on forest roads

    Officials say someone is placing sharpened rebar spikes around Forest Service roads in Arizona.More >>
    Officials say someone is placing sharpened rebar spikes around Forest Service roads in Arizona.More >>
  • Website ranks Yuma # 1 for worst place in the U.S. for singles

    Website ranks Yuma # 1 for worst place in the U.S. for singles

    Yuma, AZ - People having trouble finding a date or significant other could blame the local economy according to one website. More >>