Anyone worried about missing this years rally in commodities may want to look again. Outside of energy, the returns are decidedly mixed. The Bloomberg Commodity Index ended the first quarter up 6.6% yet down 2% in March and up only 3.1% from year-end 2019.
Bloomberg Commodity Index
Monthly Return = Monthly returns of the well diversified Bloomberg Commodity Index
Cumulative Return = Cumulative Return starting 12/31/2019
Source: Bloomberg.com
Commodity Sectors
The energy and agriculture sectors were up, precious metals were down.
Select Q1 2021 Sector Returns of the Bloomberg Commodity Index
Source: Bloomberg.com
Commodities
The top gainer in the first quarter was, predictably, gasoline, up 23%, followed by crude oil and heating oil in the teens. The worst performing commodity for the period was gold, down 10.5%.
Individual commodity returns from the Vista basket.
Source: Barchart.com
Outlook
As Covid retreats, the economy and commodity demand will restore to pre-Covid levels and as growth proceeds, the outlook will remain bullish for the near and mid-term. Long-term, energy will face its own sector and source rotation but no doubt demand will likely overtake technology advance and prices are likely rise to its former highs and beyond.
Note: All returns shown are continuously compounded.
Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Please follow this blog by email.
© 2021 George Rahal.
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