From the Desk of Our CIO

Scott Smith Featured in Canadian Family Offices Article

May 22, 2024

Recently, CIO Scott Smith was featured in an article by Canadian Family Offices to emphasize the importance of commodities in a balanced portfolio for ultra-high-net-worth investors during the current commodities supercycle. Smith asserts that this supercycle began post-COVID-19 in 2020, fueled by significant fiscal stimulus. This cycle, expected to last 10 to 15 years, is characterized by increased demand driven by domestic reindustrialization in response to supply chain vulnerabilities exposed by the pandemic.

Smith highlights the firm’s bullish stance on copper and industrial metals due to underinvestment and tight supply chains, which are expected to benefit from the global shift to renewable energy, increased AI usage, and India’s industrial growth. He also favours precious metals like gold and silver, and cryptocurrencies, as hedges against persistent inflation driven by continued fiscal stimulus. In 2024, industrial and precious metals, along with natural gas, are projected to perform well due to growing global demand and grid challenges. Over the past six months, Viewpoint has seen strong returns from precious metals, cryptocurrencies, and agricultural commodities like cocoa and coffee, influenced by underinvestment and supply disruptions.

Smith warns that a global recession could dampen commodity demand from a cyclical perspective, but underlying fundamentals will underpin a secular bull market. He advises ultra-high-net-worth investors to allocate 10-20% of their portfolios to commodities to enhance robustness and mitigate risks, given their low correlation to equities and bonds.


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