Bransby Whitton

The European Central Bank (ECB) raised its deposit facility rate by another 50 basis points (bps) to 3% at the March meeting, bringing its policy rate further into restrictive territory. Nonetheless, we would characterize the outcome as dovish because instead of giving strong guidance on its intentions for the next monetary policy meeting in May, the ECB opted for a cleaner meeting-by-meeting approach, with an emphasis on data dependence.

One truism spanning the last three decades has been that emerging markets are a leveraged play on global growth – often outperforming when developed markets (DM) are growing but susceptible to sharp downturns when DM conditions are less favorable.

Investors typically look to a commodities allocation to provide three key benefits to their portfolios: diversification, inflation protection and return potential. But for many investors, the return benefit of commodities has been difficult to grapple with amid challenging performance in recent years. We believe investors should not extrapolate this recent experience into the future because commodity returns tend to be cyclical.