Verus explores the 2019 real assets landscape, arguing that traditional inflation hedges may be less effective as deflation risk quietly builds late in the cycle. The paper leans cautious, highlighting weak commodity performance and moderating real estate returns while suggesting investors rethink where true diversification actually exists.
Real Asset Outlook
Verus Investments
Research
34 Pages
Key Takeaways
Commodities Structural Weakness: The Bloomberg Commodity Index delivered -3.8% annual returns over 10 years, reinforcing a bearish stance despite seemingly attractive valuations.
Inflation Versus Deflation Risk: Core CPI hovered between 2.0% and 2.3%, yet slowing trends and a 1.9% headline reading signal rising concern about deflation over inflation.
Real Estate Return Shift: Vacancy declines and rising NOI persist, but appreciation is slowing, with income now driving a larger share of total returns as valuations normalize.
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