Due to the Russia-Ukraine war and COVID-19 lockdowns in China, the deepening global supply shortage has pushed commodity prices to multi-year highs of late. Amid the supply shortage, the growing demand for energy, metals, and other commodities from several industries is driving price surges.
Since the Fed’s planned interest rate increases are not expected to tame inflation soon, rising prices should benefit companies dealing with essential commodities. Investors’ interest in this space is evident in the iShares GSCI Commodity Dynamic Roll Strategy ETF’s (COMT) 34.2% gains year-to-date versus the SPDR S&P 500 ETF Trust’s (SPY) 12% loss.
