The perceived efficiency of an investment can change based on investment horizon and how risk is measured. This is something we explored in a Research Brief recently released through the CFA Institute Research Foundation titled "Investment Horizon, Serial Correlation, and Better (Retirement) Portfolios."
In this piece, our focus narrows to how the optimal allocation to real assets, in particular commodities, varies by investment horizon, especially when considering inflation. We demonstrate that while commodities may appear to be relatively inefficient when focusing just on annual (calendar year) historical risk and return values, when viewed over longer time horizons (i.e., considering serial dependencies) the asset class becomes significantly more efficient and worthy of consideration in client portfolios, particularly for inflation sensitive investors like those savings for retirement.
In addition, we believe that we are in the early stages of a longer-term bull cycle for commodities, that makes it an attractive asset class to incorporate into strategic portfolio allocations. The first section of this paper provides an overview of this belief.
Managing Director, Portfolio Manager and Head of Retirement Research
|PGIM DC Solutions
david.blanchett@pgim.com
Managing Director, Portfolio Manager and Strategist
|PGIM DC Solutions
jeremy.stempien@pgim.com
This website is intended for INSTITUTIONAL INVESTORS located in United States. Please set your preferences.
*Required Fields
Sorry based on your current selections, you cannot continue. Please update your selections or visit pgim.com for more information.
By continuing on to PGIM.com you are agreeing to the following:
For Professional Investors only. All investments involve risk, including the possible loss of capital.
This website is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence.
PGIM is the principal asset management business of Prudential Financial, Inc. (PFI), and a trading name of PGIM, Inc. and its global subsidiaries. PGIM, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training.
Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. PGIM, the PGIM logo and Rock design are service marks of PFI and its related entities, registered in many jurisdictions worldwide.
The information on this website is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. In making the information available on this website, PGIM, Inc. and its affiliates are not acting as your fiduciary.
© 2025 Prudential Financial, Inc. and its related entities.