Fund Idea Recession fears have struck markets. Can the | FSMOne SG - Research Highlights

Fund Idea

Recession fears have struck markets. Can the commodities sector overcome them?

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• The increasing talks about a looming recession have dampened the near-term outlook for the commodities sector. Nevertheless, the case for commodities remains as the macro environment is still dominated by record inflation and supply tightness.

• In a high inflationary environment that we are currently in, commodities serve as a useful inflation hedge as their returns have historically been positively correlated with inflation levels.

• China’s potential recovery would be a positive catalyst to the commodities sector, given that it is one of the largest commodity importers. President Xi Jinping has called for an “all out” effort to increase infrastructure spending this year in the hope of fuelling economic growth.

• With diversified exposure to the energy, mining, and agriculture sectors, investors can consider the Blackrock Natural Resources Growth & Income Fund to get exposure to the commodities sector.

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: Blackrock Natural Resources Growth & Income Fund