Think FAANG 2.0 says Merrill Lynch: Fuel, Aerospace, Agriculture, Nuclear, Gold/Metals
In a recent capital market outlook, Merrill Lynch said “Real assets and Alternative Investments, for qualified investors, continue to look like attractive options to help mitigate rolling volatility and escalating geopolitical tensions.” They go on to talk about current geopolitical risks and the market outlook for the foreseeable future. As far as we can tell, they have coined the term “FAANG 2.0”. Let’s take a closer look at this acronym and what it means for investors.
Fuels, Aerospace, Agriculture, Nuclear/Renewables, and Gold/Metals/Minerals. These are the new sectors of choice according to the aforementioned capital market outlook published by Merrill Lynch. Some of the most important and relevant facts that their experts share regarding these sectors and their importance in the coming years are highlighted below;
- “Geopolitical tensions, strong demand, constrained supplies, underinvestment—a number of factors will keep energy prices elevated over the medium term.”
- “The planet will need to produce more food in the next four decades than in the past 8,000 years.”
- “Viewed as a “safe haven”, gold prices are up over 6% in 2022 and posted the best February since 2016, underscoring worries over inflation and war.”
- “The Electric Vehicle (EV) transition will be mineral-intensive. A typical EV requires six times the mineral inputs of a conventional car, according to the International Energy Agency.”
How can Investors Access these Sectors?
The traditional 60/40 stock/bond portfolio doesn’t seem to cut it in today’s investment climate. Advisors and investors alike have participated in one of the longest bull market runs in history, but the current environment seems to lend itself to real assets that tend to perform well in an inflationary environment. The problem for advisors is finding someone who can help them strategically access these sectors. This is where we can help.
Macro Sky has multiple alternative investment strategies that focus on three pillars within the real assets/alternative investment realm. Energy, Land/Real Estate, and Metals are the core investment areas we focus on. These three sectors, when weighted properly, have the potential to protect investors in times such as these. It seems that the experts at Merrill Lynch agree, real assets and alternative investments should be considered for your clients’ portfolios moving forward. Reach out today, if you’d like to learn how.