Why structural returns shine in any inflationary environment

Independent of risk factors

In 1923, John Maynard Keynes was analysing commodity futures markets when he noticed that the costs of commodity storage, which were often very high, were baked into futures pricing.

He observed speculators invested in commodity futures would not only receive the commodity return but would also be paid the storage costs on top. Keynes had discovered the first structural return - a return source embedded within a traditional asset class that is independent of the macro risks driving the market. Even Keynes did not fully understand the importance of what he had discovered. It took 85 years before the concept of structural returns became embedded in financial lexicon. The fog of war: Lasting implications of Russia-Ukraine conflict Structural returns are unique and...