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David Chang
David Chang
CFA
Commodities Portfolio Manager

Industry experience

With Wellington

20
20

As a commodities portfolio manager, David manages long-only and long/short commodity approaches on behalf of our clients. He collaborates with Wellington Management’s investment resources, including natural resource-focused global industry analysts and macroeconomists, to analyze the fundamental drivers of commodity markets. David is the vice chair of the Wellington Management Foundation Board, the sponsor to the Wellington Young Professionals business network, and a member of Wellington’s Upstanders Group. The Upstanders is a grassroots effort composed of over 150 Partners and Managing Directors, who are engaging in sponsorship, mentorship, and other activities aimed at improving diversity and inclusion at the firm.

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Inflation has become a top-of-mind topic for clients in recent months, with many exploring ways to position for potentially higher inflation in the period ahead. However, after a decade of “disinflation,” we believe the investment community continues to anchor to the prior regime and to some stubborn misconceptions around inflation hedging. Here are five that could prove costly if, in fact, inflation does rise.

Misconception #1: You can wait to allocate to inflation hedges until we have higher inflation.

Reality: Timing when to buy inflation-related assets is just as difficult as trying to “market time” any other type of investment. That’s why investors are advised to hold strategically diversifying assets like stocks and bonds and, in our view, should also own inflation-sensitive assets as a long-term, strategic portfolio allocation. As with any asset, the fundamentals are…

MACRO
THEMES
Nick Petrucelli
Nick Petrucelli
CFA
Portfolio Manager
Boston
David Chang
CFA
Commodities Portfolio Manager
Boston

As I observed in my January 2020 publication, “The lost decade for commodities”, the roll yield1 — the cost of carry, or the return associated with “rolling” a short-term futures contract into a longer-dated contract — has been a persistent headwind for commodities over the past decade. In fact, negative roll yields were the leading detractor from commodities’ performance during the 10-year period ended 31 December 2019.

But history shows that the roll yield hasn’t always exerted such a drag on the asset class. On the contrary, looking at commodity returns by decade, roll yield was actually a positive contributor to the performance of the S&P Goldman Sachs Commodity Index in the 1970s and 1980s and only modestly…

MARKETS
David Chang
CFA
Commodities Portfolio Manager
Boston
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