Natural resources equities vs. commodities: understanding the structural advantages of equity exposure

Investors seeking exposure to natural resources typically choose between: • Physical commodities, often accessed via futures; indices like the Bloomberg Commodity Index gain exposure in this way. • Natural resources equities; i.e., the shares of companies that produce and process commodities. These investments share many of the same drivers of risk and return. They tend to perform well when inflation is higher, and they offer exposure to real-asset cycles and structural growth themes such as electrification and AI infrastructure spending. However, their risk and return profiles...