In March 2021, our call on the commodities fund we added panned out well. But we decided to issue a book profit call in June 2022, as we wanted to preserve some of the profits given the cool off that was visible then in commodity prices.
And as anticipated, commodities cooled off a fair bit globally. Triggered by inflation-driven rate hikes and recession fears, pre-emptive physical destocking (reducing inventories anticipating higher cost of holding inventories) resulted in lower prices. The traded Goldman Sachs Commodity index graph below will tell you that our call was largely in line with this index’s move.
Prime Recommendation: Commodity and the rise of the old economy
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Vidya Bala
Vidya Bala is a co-founder of PrimeInvestor. Vidya helped build one of the country’s earliest robo-advisory solutions in the country in her earlier role at FundsIndia. A Chartered Accountant by qualification, she has more than 18 years of experience, of which over 15 were spent analyzing the markets. LinkedIn | Twitter
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