“It’s amazing to see actually the coordinated growth. I keep using this phrase. But if you take what’s called the OECD, the developed world, and you combine that with the top ten emerging markets by GDP, they are all growing right now. We haven’t had this coordinated growth since ’04, ’05, and ’06. There’s usually someone that’s exhibiting some sort of recessionary behavior.“
Economies are experiencing important growth in both developed and emerging markets, recent hard economic data has revealed. This coincides with the four-month rally commodity prices have been going through.
“There is a large build out, and there is this need for commodities, so we are actually in kind of this commodity boom, but it’s overshadowed by the S&P 500 (^GSPC) which sets highs every day.The market’s doing quite well. Again, it’s flat year to date, but in the last three or four months it’s had a very very strong performance.”
Regardless, commodities have been disliked by investors for a long time.
“A lot of investors came late to the commodity party where we had … what people refer to as a super cycle in commodities, essentially when China was consuming way above historical averages and really driving the price upward of commodities.”
Sherman helms DoubleLine Strategic Commodity Fund (DBCMX) (DLCMX). The firm has outperformed the Bloomberg Commodities Index since it first began operating. Combining a long-only approach with a long-short approach, the fund uses quantitative signals to define its positions.
Commodities are often included in investment portfolios as factors of diversification, bringing in benefits that investors can‘t obtain from stocks or bonds, as per Sherman.