The future is more physical than you think

For many investors, commodities remain the asset class you rent rather than own. Inflation rising? Buy commodities. Oil spikes? Buy commodities. Geopolitical tensions flare up? Buy commodities.

Then the crisis passes, the headlines move on, and commodities are shown the door.

I’m here to tell you that thinking is downright backward.

The irony is that many of the investors who are most excited about the future are already making the case for commodities without realizing it. They are bullish on artificial intelligence (AI). They believe in electrification. They expect continued investment in infrastructure, energy security, and more resilient supply chains. They talk about data centers, power demand, grid modernization, and critical minerals.

What do they think all of that runs on?

AI isn't floating in the cloud. Data centers require enormous amounts of energy. Electrification requires copper, nickel, and other industrial metals. Energy security requires investment in traditional and alternative energy sources. Resilient supply chains require raw materials.

In other words, many of the biggest investment themes of the next decade begin with commodities. Yet commodities are still too often discussed as a side bet on inflation rather than a claim on the physical building blocks of economic growth. 

The commodity contradiction

Many investors hear “commodities” and think volatility. I hear opportunity. Not because commodities won't be volatile. Of course they will. Every asset class is volatile at some point. The real question is whether portfolios have meaningful exposure to the forces shaping the world we're actually investing in.

My view is that our industry has done a good job explaining why commodities can matter during periods of stress. We have done far less to explain why they may matter during periods of growth.

Changing the conversation

Not education about futures curves or roll yields. Education about relevance.

The conversation needs to shift from "How do commodities behave when inflation rises?" to "What assets benefit from the real-world demand created by AI, electrification, energy security, and infrastructure investment?" Those are very different conversations.

That distinction matters. This isn’t about asking investors to abandon the themes they believe in. It’s about helping them recognize the physical foundations beneath those themes and consider whether their portfolios reflect that reality.

By investing in education and reframing the narrative, we can help advisors move the conversation beyond commodities as a niche allocation or crisis trade. We can give advisors the context to discuss where commodities may fit within a broader diversification toolkit and how they may address evolving client needs. 

The future may look digital. But it will still be built, powered, and connected by physical resources. The opportunity for advisors is to make the connection clear, with confidence and clarity.

Important information

The statements and opinions expressed are those of the author and are as of the date of this report. Any forward-looking statements regarding future events or future financial performance are only predictions and actual events or results may differ materially. Reader should not assume that any investment in securities was or will be profitable in the future. This information is not intended to be investment advice and is not a recommendation to buy or sell any security.
For informational/educational purposes only, not a recommendation, solicitation, or offer to buy/sell securities. Commodities involve risks, including market volatility, liquidity issues, and potential loss of principal.
Past performance does not guarantee future results.

EFS000700  2/15/27
AA-261026-214606-2

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