The war in Ukraine has caused a lot of investors to wonder how they can keep as much of their capital as possible. Investors have seen governments seize GoFundMe accounts, central bank assets, and oligarch assets. According to Robert Minter, director of investment strategy for abrdn, this has led investors to wonder “‘if that can happen to them… could it happen to me?’”
This has led investors to turn towards alternative assets like bitcoin and gold.
abrdn has an ETF for investors to incorporate gold into their portfolios. The abrdn Physical Gold Shares ETF (SGOL), “a physical gold fund” that Minter said can “help offset some of the portfolio concerns if the dollar becomes less of a well-accepted reserve currency.”
“The gold is actually in a vault,” Minter told VettaFi’s editor-in-chief Lara Crigger at Exchange: an ETF Experience 2022. “You can go on our website and see the serial number of the bar. It’s not owned by 17 different people, it’s the actual one-to-one ratio.”
Another big focus for abrdn is the environmental, social, and governance movement, which Minter said “might well be the largest project in human history if we can pull this off.”
abrdn also has a tool for this theme as well. The abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF (BCIM) seeks to provide investment results that closely correspond to the performance of the Bloomberg Industrial Metals Total Return Subindex. The index consists of four commodities futures contracts concerning aluminum, copper, nickel, and zinc, metals which are essential for electric vehicles, wind turbines, solar panels, and batteries.
One of the more popular questions abrdn gets is whether the commodities move is over.
“Commodities all of a sudden are in the news because of the unfortunate situation in Europe with Russia and Ukraine,” Minter said. “But really, the bullish story on commodities started a year and a half, two years ago.”
For example, last year, La Nina “pulled moisture off the land and into the ocean,” causing drought in North and South America and lowering crop yields. “And it is going to do it again this year,” Minter said.
This results in “a period of low production and then you leave that year with low inventories, and you go into another year of low production,” Minter explained. “That sets up a very bullish scenario for pricing. That happens even without anything going on in Russia and Ukraine.”
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