Commodities provide resilience to geopolitical shocks and unexpected inflation, and should be included in multi-asset portfolios as a hedge against spike inflation. The current geopolitical environment increases the value of this hedge, and while prices may come down with peace, the structural need for inflation protection remains.
Despite the oil price having already risen above $80, ongoing Middle East tensions and supply concerns mean oil may not have peaked yet and could push higher.
Diversifying credit exposure away from US high yield towards European asset-backed securities and emerging market corporate bonds for better valuation and risk-reward.