4 Nov 2021
11 minutes
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Natural resources equities can mitigate vulnerability to equity market-regime shifts. The asset class has distinct performance drivers that may complement existing equity allocations.
A research trip to China has reinforced that the energy transition and intelligent economy are accelerating – and investable
The decarbonisation investment universe is well-stocked with ‘heavy-asset, low-obsolescence’ companies that are well-placed to benefit from an investment supercycle.
Investors typically access natural resources through either commodities or equities, but the outcomes can look very different over time. This paper explores why natural resources equities have historically provided a broader and more resilient source of returns.
Financial markets surged in April, defying geopolitical tensions. Global equities delivered their strongest gain since late 2020, led by technology and AI-linked stocks, even as the US-Iran conflict kept oil prices elevated and complicated the inflation outlook. Government bonds weakened as higher energy prices pushed out rate cut expectations, while credit markets performed well in the risk-on environment. Commodities were mixed: industrial metals advanced, oil was volatile, and gold was flat. Investor sentiment improved as markets looked past near-term risks and focused on resilient earnings and structural growth themes.
Following recent research trips, the Ninety One Global Environment team report back from the world’s first ‘electro-state’.
Oil shocks don’t just disrupt, they accelerate change. Higher prices and energy insecurity are fast-tracking the shift to electrification and clean technology, led by emerging markets.
Global markets took a decisive turn in the first quarter (Q1) of 2026, as early optimism gave way to a geopolitical shock. A strong start to the year was derailed by escalating conflict in the Middle East, triggering a sharp surge in oil prices, reigniting inflation concerns and forcing a rapid re-pricing of interest rate expectations. The result was a broad-based risk-off move across global markets, with macroeconomic factors reasserting themselves as the primary drivers of market performance.
Easy globalisation is over: multipolarity, bottlenecks and public dissatisfaction are reshaping the world. For investors, that means old assumptions are less reliable and resilience matters more.
A new commodity order is taking shape, defined by geopolitical fragmentation, electrification, supply constraints, regionalisation of energy and materials markets, and a re-ordering of global supply chains.
Market conditions appear to be shifting in favour of emerging market equities. We explore how to structure an allocation to achieve broad exposure to the return-potential of the asset class while managing risks.
Oil markets have reacted sharply to the effective closure of the Strait of Hormuz. Paul Gooden, Head of Global Natural Resources at Ninety One, explains why the disruption is reverberating through oil and gas markets, how supply constraints are pushing prices higher, and what it could mean for energy markets in the weeks and months ahead.
Financial markets were broadly positive in February. US Treasury yields declined and global equities posted gains on resilient economic data. However, technology stocks had a weaker month, selling off amid concerns about potential disruption from AI. Commodities were again strong: precious metals continued to rally, while oil prices rose, partly on fears of escalating conflict in the Middle East. US-Israeli strikes on Iran took place on the final day of the month after most financial markets had closed. Meanwhile, the US Supreme Court struck down some of the tariffs imposed last year, although new levies were soon introduced via an alternative legal route.
Global equities are entering a new regime that looks very different from the last decade. As market leadership broadens and rotations accelerate, investors are reassessing the role of core within portfolios.
Capital is returning to emerging market equities. This paper sets out why the investment approach matters and why active strategies have been rewarded in emerging markets.
A noisy month in geopolitics drove up market volatility, but global equities made gains – helped by signs of strength in the global economy. US dollar weakness and inflows from investors seeking diversification boosted emerging market (EM) assets. In fixed income, softer inflation data supported European bonds, but political uncertainty jostled Japan's yield curve. Commodities made a strong start to the year.
Sahil Mahtani, Director of Ninety One’s Investment Institute, and Paul Gooden, Portfolio Manager for Global Natural Resources, discuss Venezuela and broader energy themes following the Goldman Sachs Global Energy Conference in Miami.
Risk assets capped a strong year with gains in Q4. Equities rose, while credit and emerging markets fixed income also delivered healthy returns. Oil lagged, but other commodities finished on a high, with precious metals extending their advance. The US Federal Reserve cut interest rates twice during the quarter, but officials made it clear that the bar for further easing is rising.
There are plenty of catalysts for Chinese equities in 2026, with the latest Five-Year Plan likely to be the centre of attention. We believe that there are abundant opportunities in the Chinese equity market, which still trades at a notable discount to developed markets.
Emerging markets outperformance tends to happen in multi-year cycles. The question for 2026 is whether we are closer to the end or the beginning of this EM cycle. There is strong evidence that it is the latter.
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