- Precious metal commodities historically have traded in narrow ranges over the short-term horizon
- Tail risk related to demand and supply shocks much less common than equities
- Attractive setup for algorithms trading on observed intraday patterns
- Precious metals are traded in USD, no FX exposure related to currency conversions
- Less exposed to event risks with no company specific SEC filings/earnings release creating volatility
- High correlation with fundamental factors driving commodity prices
- e.g. Silver has high correlation* with USD and US real-yields (inflation adjusted interest rates)
- Historically Diversifying: low/near-zero correlations to traditional equity and bond indices
- With equities under stress, and with bonds offering negative real yields in USD becoming less attractive as a source of income, this non-correlation may be even more important
- No risk to leadership transition/mismanagement (think Tesla!)
- Deep liquidity in US listed ETFs
- All holdings are level 1
- Prices in line with ETF NAVs
- Act as a natural hedge during periods of macroeconomic uncertainty
Invest in commodities via our Multi Strategy – Separately Managed Account
