{"id":137633,"date":"2026-03-03T11:27:24","date_gmt":"2026-03-03T16:27:24","guid":{"rendered":"https:\/\/professional.content.cirrus.bloomberg.com\/professional2023\/insights\/commodities\/rethinking-commodities-allocation-after-rapid-price-increases\/"},"modified":"2026-03-03T12:33:05","modified_gmt":"2026-03-03T17:33:05","slug":"rethinking-commodities-allocation-after-rapid-price-increases","status":"publish","type":[3762],"link":"https:\/\/professional.content.cirrus.bloomberg.com\/professional2023\/insights\/commodities\/rethinking-commodities-allocation-after-rapid-price-increases\/","title":{"rendered":"Rethinking commodities allocation after rapid price increases"},"content":{"rendered":"<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-69f3a91895287'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-7\"\n    style=\"\"\n    >\n    <p><div\n    class=\"bbg-spacer bbg-spacer--lg\"\n    >\n<\/div><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p class=\"small\"><strong><span style=\"font-size: 14px; letter-spacing: 1px; color: #0062dd;\">ARTICLE<\/span><\/strong><\/p>\n\n<\/div>\n<div\n    class=\"bbg-spacer bbg-spacer--sm\"\n    >\n<\/div>    <h1 class=\"bbg-metadata bbg-metadata--title\">Rethinking commodities allocation after rapid price increases<\/h1>\n<div\n    class=\"bbg-spacer\"\n        style=\"height: 50px !important\"\n    >\n<\/div>    <ul class=\"bbg-categories_list\">\n                    <li>\n                <a href=\"https:\/\/professional.content.cirrus.bloomberg.com\/professional2023\/insights\/category\/commodities\/\" rel=\"category tag\">\n                    Commodities\n                <\/a>\n            <\/li>\n                    <li>\n                <a href=\"https:\/\/professional.content.cirrus.bloomberg.com\/professional2023\/insights\/category\/markets\/\" rel=\"category tag\">\n                    Markets\n                <\/a>\n            <\/li>\n            <\/ul>\n<\/p>\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-5\"\n    style=\"\"\n    >\n    <div id=\"\" class=\"wpb_content_element bbg-single-image align-left\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"800\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/364484988resiz.jpg\" class=\"bbg-single-image__image attachment-full\" alt=\"Electronic screen stock display\" title=\"Electronic screen stock display\" \/>\n        \n            <\/figure>\n<\/div>\n\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-69f3a918b11a5'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-6 bbg-column--m-width-6\"\n    style=\"\"\n    >\n    <p>    <p class=\"bbg-metadata bbg-metadata--date\">March 3, 2026<\/p>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><strong>Bloomberg Professional Services<\/strong><\/p>\n\n<\/div>\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2 bbg-column--valign-middle bbg-column--m-width-2 bbg-column--s-padding-right-2\"\n    style=\"\"\n    >\n    <div class=\"bb-tts\"\n\tdata-selector=\"main\"\n\tdata-label=\"Speak this page\"\n\tdata-custom-play=\"Play\"\n\tdata-custom-pause=\"Pause\"\n\tdata-custom-stop=\"Stop\"\n\tdata-overlay=\"false\"\n\tdata-invert=\"false\"\n\tdata-no-time=\"false\"\n\tdata-no-button-text=\"false\"\n\tdata-one-button=\"true\"\n\tdata-one-style=\"true\"\n\tdata-hide-stop=\"true\"\n\tdata-voice=\"Gordon\"\n\tdata-pitch=\"1\"\n\tdata-speed=\"1\"\n\tdata-align=\"flex-start\"\n>\n<\/div>\n\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-compact bbg-row--full-bg-bleed\" data-anchor='row-69f3a918b4bca'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8 bbg-column--has-bg-color\"\n    style=\"background-color:#e6f3ff;border-radius: 16px 16px 16px 16px;\"\n    >\n    <div class=\"wpb_content_element bbg-card  bbg-card-custom bbg-card-text-black\" id=\"card_1\" data-card_type=\"no_image\">\n      <style>#card_1 .bbg-card__innerwrapper {background-color: #e6f3ff;}#card_1 .bbg-card__innerwrapper {\n\tborder: 1px solid #e6f3ff !important;\n\t}#card_1:hover .bbg-card__innerwrapper {\n\tborder: 1px solid #e6f3ff !important;\n\t}#card_1 .bbg-card__innerwrapper {\n\tpadding: calc(var(--brand-large-padding, 40px) - 1px) !important;\n\t}#card_1 .bbg-card__innerwrapper .bbg-card__title {\n\tcolor: #000000 !important;\n\t}#card_1 .bbg-card__innerwrapper .bbg-card__content,#card_1 .bbg-card__innerwrapper .bbg-card__content p  {\n\tcolor: #000000 !important;\n\t}#card_1.bbg-card_hasImage .bbg-card__innerwrapper{padding-top: calc(var(--brand-default-padding, 16px) - 1px);padding-left: calc(var(--brand-default-padding, 16px) - 1px);padding-right: calc(var(--brand-default-padding, 16px) - 1px);}<\/style>\n  \n  \n  <div class=\"bbg-card__innerwrapper\">\n    <div class=\"bbg-card__content\">\n      \n              <div class=\"bbg-card__eyebrow\" style=\"color: #000000\">KEY TAKEAWAYS<\/div>\n      \n      \n              <div class=\"bbg-card__wysiwyg bb-wysiwyg\"><\/p>\n<ul>\n<li>Shifting commodity exposure further out the futures curve may help reduce drawdowns after strong price gains while maintaining upside participation in rising markets.<\/li>\n<li>Negative roll yield for commodity futures curves in contango can erode long-only returns, particularly for front month contracts where roll yield can be the most negative.<\/li>\n<li>Bloomberg Commodity Index 3 Month Forward (BCOMF3) has historically higher annualized returns and lower downside volatility than near-dated exposure such as BCOM.<\/li>\n<\/ul>\n<p>\n<\/div>\n          <\/div>\n\n      <\/div>\n\n  <\/div>\n\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-compact bbg-row--full-bg-bleed\" data-anchor='row-69f3a918c34cb'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <p><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><em><span class=\"TextRun SCXW15932533 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW15932533 BCX0\">This article was written by Jim Wiederhold, Commodity Indices Product Manager at Bloomberg.<\/span><\/span><\/em><\/p>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span data-contrast=\"auto\">Commodities are commonly used by market participants to support diversification and guard against inflation. However, one of the challenges many investors face when holding exposure over the long term is negative roll yield, which results from having to roll expiring futures contracts from the front month to the next.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Because most commodity futures curves often tend to be upward sloping (commonly referred to as in contango), a long position typically needs to be sold at a lower price and bought at a higher price for the next month future contract prior to contract expiration. In this article, we look at how shifting exposure further out the futures curve may help manage volatility after strong price gains. <\/span><\/p>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2><span class=\"TextRun MacChromeBold SCXW152907263 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun CommentStart SCXW152907263 BCX0\" data-ccp-parastyle=\"heading 2\">How should investors position commodities in their portfolios?<\/span><\/span><span class=\"EOP SCXW152907263 BCX0\" data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:360,&quot;335559739&quot;:80}\">\u00a0<\/span><\/h2>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span class=\"TextRun SCXW7521059 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW7521059 BCX0\">A l<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">ong c<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">ommodities exposure tends to work best\u00a0<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">when it is a core, continuous allocation because commodities appreciate most\u00a0<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">during\u00a0<\/span><\/span><span class=\"TextRun Underlined SCXW7521059 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun CommentStart SCXW7521059 BCX0\">unexpected\u00a0<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">situations<\/span><\/span><span class=\"TextRun SCXW7521059 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW7521059 BCX0\">\u00a0(<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">as these inflection points are difficult to price in ahead of time)<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">,<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">\u00a0like an equity market downturn or surprise rise in inflation<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">. It is\u00a0<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">very difficult<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">\u00a0to\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW7521059 BCX0\">time<\/span><span class=\"NormalTextRun SCXW7521059 BCX0\">\u00a0the market.\u00a0<\/span><\/span><span class=\"EOP SCXW7521059 BCX0\" data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n\n<\/div>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-69f3a918c6d04'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-3\"\n    style=\"\"\n    >\n    <p><div\n    class=\"bbg-spacer bbg-spacer--sm\"\n    >\n<\/div><hr class=\"bbg-separator bbg-separator-1\" style=\"height:1px;\" \/>\n<div\n    class=\"bbg-spacer\"\n        style=\"height: 32px !important\"\n    >\n<\/div><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p class=\"small\"><strong><span style=\"font-size: 14px; letter-spacing: 1px;\">PRODUCT MENTIONS<\/span><\/strong><\/p>\n\n<\/div>\n\n<div\n  id=\"cta_582513902624197866\"\n  class=\"wpb_content_element bbg-cta no-icon\">\n  <style>\n    \n    \n    \n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p left\">\n      <a\n        class=\"bbg-cta-link link\"\n        href=\"https:\/\/www.bloomberg.com\/professional\/products\/indices\/commodities\/\"\n        target=\"\"\n        rel=\"\"\n        data-section-name=\"Bloomberg Commodity Indices\"\n        >\n                      Bloomberg Commodity Indices\n                <\/a>\n    <\/p>\n  <\/div>\n<\/div>\n<div\n    class=\"bbg-spacer bbg-spacer--sm\"\n    >\n<\/div><div\n    class=\"bbg-spacer\"\n        style=\"height: 32px !important\"\n    >\n<\/div><hr class=\"bbg-separator bbg-separator-1\" style=\"height:1px;\" \/>\n<\/p>\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-1\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-6\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span style=\"font-weight: 400;\">After periods like the start of 2026, when front month commodity futures contracts move higher with speed, some market participants may consider shifting exposure to places further out the curve like the third futures contract for example. These contracts tend to be less volatile during drawdowns but still allow for upside participation when commodity prices are on the rise in a procyclical environment.<\/span><\/p>\n\n<\/div>\n\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-compact row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-69f3a918cacbc'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-2\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <p><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span data-contrast=\"auto\">The futures contracts for commodities further out the curve tend to\u00a0demonstrate\u00a0lower volatility than front month futures,\u00a0which react more noticeably when news moves commodity prices. Part of the\u00a0reason is\u00a0that further dated futures contracts have more time before\u00a0expiration, so near-term price moves may reverse before the contract expires, unlike near dated futures with less time to maturity.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Exhibit 1 shows that over time, exposure to commodities through the third futures contract tends to outperform near dated exposure like\u00a0<\/span><a href=\"https:\/\/www.bloomberg.com\/professional\/products\/indices\/commodities\/\"><span data-contrast=\"none\">BCOM<\/span><\/a><span data-contrast=\"auto\">\u00a0to the upside and has less volatile yearly moves to the downside.\u00a0Since 2016, the total annualized return for BCOM was +7% and for BCOMF3 it was +9%.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1482\" height=\"886\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png\" class=\"bbg-single-image__image attachment-full\" alt=\"BCOM F3 Yearly Outperformance Over BCOM\" title=\"BCOM F3 Yearly Outperformance Over BCOM\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png 1482w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png 100w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.49.45%E2%80%AFPM.png 181w\" sizes=\"auto, (max-width: 1482px) 100vw, 1482px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black 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<p><div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span style=\"font-weight: 400;\">Tactically shifting exposure further out the curve after spot and front month futures prices rise could be of interest for sophisticated investors looking to ensure volatility does not hamper portfolio returns. Exhibit 2 illustrates how front month futures historically reacted following strong prior-year gains compared with third month futures exposure. Moving exposure away from the near dated contracts after gains would have allowed a market participant to experience fewer drawdowns historically. <\/span><\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1470\" height=\"1208\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.05%E2%80%AFPM.png\" class=\"bbg-single-image__image attachment-full\" alt=\"Defensive Attributes of BCOM F3 - Average Annual Performance Improves by +3.3% After Strong Prior Year Performances\" title=\"Defensive Attributes of BCOM F3 - Average Annual Performance Improves by +3.3% After Strong Prior Year Performances\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.05%E2%80%AFPM.png 1470w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.05%E2%80%AFPM.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.05%E2%80%AFPM.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.05%E2%80%AFPM.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.05%E2%80%AFPM.png 131w\" sizes=\"auto, (max-width: 1470px) 100vw, 1470px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2><span class=\"TextRun MacChromeBold SCXW118057272 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun CommentStart SCXW118057272 BCX0\" data-ccp-parastyle=\"heading 2\">Volatility dynamics and futures curve dispersion<\/span><\/span><span class=\"EOP SCXW118057272 BCX0\" data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:360,&quot;335559739&quot;:80}\">\u00a0<\/span><\/h2>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span data-contrast=\"auto\">Part of the reason for this is the lower volatility\u00a0of the futures\u00a0contracts further away from spot\u00a0prices. Market participants want to see volatility to the upside when holding\u00a0long exposure\u00a0but are always concerned about volatility to the downside as with any asset class. A rotation after gains could be worthwhile after front month BCOM has risen over 11% annualized over the last five years.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Exhibit 3 shows the WTI crude oil futures\u00a0curve\u00a0at the end of\u00a0February 2026,\u00a0as well as three months, two months, and one\u00a0month\u00a0before.\u00a0As of this writing,\u00a0WTI futures prices across the curve have moved higher as can be seen in\u00a0yellow\u00a0and\u00a0a very large\u00a0jump in near dated prices can be seen where crude is at $66\u00a0currently\u00a0at the front of the curve while it was\u00a0below $59 three months ago. But further out each curve, one can see prices have not moved\u00a0up\u00a0as\u00a0aggressively.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1476\" height=\"1288\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.54.53%E2%80%AFPM.png\" class=\"bbg-single-image__image attachment-full\" alt=\"WTI Crude Oil Futures Curves at the End of February 2026 and 1- 2- 3 Months Prior\" title=\"WTI Crude Oil Futures Curves at the End of February 2026 and 1- 2- 3 Months Prior\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.54.53%E2%80%AFPM.png 1476w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.54.53%E2%80%AFPM.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.54.53%E2%80%AFPM.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.54.53%E2%80%AFPM.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.54.53%E2%80%AFPM.png 124w\" sizes=\"auto, (max-width: 1476px) 100vw, 1476px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2><span class=\"TextRun MacChromeBold SCXW240415623 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun CommentStart SCXW240415623 BCX0\" data-ccp-parastyle=\"heading 2\">Macro uncertainty and stagflation concerns<\/span><\/span><span class=\"EOP SCXW240415623 BCX0\" data-ccp-props=\"{&quot;134245418&quot;:true,&quot;134245529&quot;:true,&quot;335559738&quot;:360,&quot;335559739&quot;:80}\">\u00a0<\/span><\/h2>\n\n<\/div>\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span style=\"font-weight: 400;\">Stagflation concerns are starting to become more of a concern for market participants and commodities tend to perform well during these macroeconomic regimes. The recent delayed inflation data showed a higher uptick than expected with the core PCE price index rising 3% YoY versus the previous 2.8% reading. Exhibit 4 shows the breakdown of what contributed to the price increase, with food service and accommodation rising while recreation services recorded a record jump.<\/span><\/p>\n<p><span data-contrast=\"auto\">At the same\u00a0time\u00a0we see higher inflation than expected, we saw much lower growth with the 4Q 2025 GDP reading rising only 1.4% when 2.8% was expected. These inflation and growth data points came out the same day in\u00a0February,\u00a0and\u00a0may suggest\u00a0a potential stagflation bias after a recent disinflationary growth narrative was taking hold.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n\n<\/div>\n<div id=\"\" class=\"wpb_content_element bbg-single-image align-center\">\n    <figure class=\"bbg-single-image__figure\" style=\"max-width:100%\">\n                <img loading=\"lazy\" decoding=\"async\" width=\"1468\" height=\"1250\" src=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.33%E2%80%AFPM.png\" class=\"bbg-single-image__image attachment-full\" alt=\"US PCE Household Consumption Expenditures Index Through Dec 2025\" title=\"US PCE Household Consumption Expenditures Index Through Dec 2025\" srcset=\"https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.33%E2%80%AFPM.png 1468w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.33%E2%80%AFPM.png 552w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.33%E2%80%AFPM.png 800w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.33%E2%80%AFPM.png 768w, https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&amp;type=webp&amp;url=https:\/\/assets.bbhub.io\/professional\/sites\/41\/Screenshot-2026-03-02-at-12.50.33%E2%80%AFPM.png 127w\" sizes=\"auto, (max-width: 1468px) 100vw, 1468px\" \/>\n        \n            <\/figure>\n<\/div>\n\n<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p><span style=\"font-weight: 400;\">Commodities are back in the spotlight and we have seen a broader client mix reengaging in the asset class. BCOMF3 is a benchmark for a long-only core holding of commodities that has led to better roll yield characteristics over time. It fits within Bloomberg\u2019s roll enhanced family of commodities indices and appears to demonstrate the power of a simple approach to index construction. Geopolitical tensions are ever present and diversifying a small portion of an allocation to commodities after a long run of equity outperformance could assist with portfolio performance in this new macro regime. <\/span><\/p>\n<p><span data-contrast=\"auto\">To learn more about Bloomberg Commodity Indices, click\u00a0<\/span><a href=\"https:\/\/www.bloomberg.com\/professional\/products\/indices\/commodities\/\"><span data-contrast=\"none\">here.<\/span><\/a><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n\n<\/div>\n<div class=\"bbg-accordion transparent\">\n\t<input type=\"checkbox\"  id=\"bbg-accordion-toggle-69f3a918e57ba\">\n\t<div class=\"bbg-accordion-parent\" data-accordion-toggle aria-expanded=\"false\">\n\t\t<label class=\"bbg-accordion-label\" for=\"bbg-accordion-toggle-69f3a918e57ba\">\n\t\t\t\t<h5 class=\"bbg-accordion-title\" data-label=\"Disclaimer\">\n\t\tDisclaimer\n\t<\/h5>\n\n\t\t\t\t\t<\/label>\n\t<\/div>\n\t<div class=\"bbg-accordion-content\">\n\t\t<div class=\"bb-wysiwyg\">\n\t<p><span data-contrast=\"auto\">The data and other information included in this publication is for illustrative purposes only, available\u00a0\u201cas is\u201d,\u00a0non-binding and constitutes the provision of\u00a0factual information, rather than financial product advice.\u00a0\u00a0BLOOMBERG and BLOOMBERG INDICES (the \u201cIndices\u201d) are trademarks or service marks of Bloomberg Finance L.P. (\u201cBFLP\u201d). BFLP and its affiliates, including BISL, the administrator of the Indices, or their\u00a0licensors\u00a0own all proprietary rights in the Indices. Bloomberg L.P. (\u201cBLP\u201d) or one of its subsidiaries provides BFLP, BISL and its subsidiaries with global marketing and operational support and service. Certain features, functions,\u00a0products\u00a0and services are available only to sophisticated investors and only where permitted. Bloomberg (as defined below) does not approve or endorse these materials or guarantee the accuracy or completeness of any information herein, nor does Bloomberg make any warranty, express or implied, as to the results to be obtained therefrom, and, to the maximum extent allowed by law, Bloomberg shall not have any liability or responsibility for injury or damages arising in connection therewith. Nothing in the Services or Indices shall constitute or be construed as an offering of financial instruments by Bloomberg, or as investment advice or investment recommendations (i.e., recommendations as to whether or not to \u201cbuy\u201d, \u201csell\u201d, \u201chold\u201d, or to enter or not to enter into any other transaction involving any specific interest or interests) by Bloomberg. Information available via the Index should not be\u00a0considered as information\u00a0sufficient upon which to base an investment decision. All information provided by the Index or in this publication is impersonal and not tailored to the needs of any person,\u00a0entity\u00a0or group of persons. Absence of any trademark or service mark from this list does not waive Bloomberg\u2019s intellectual property rights in that name,\u00a0mark\u00a0or logo.\u00a0\u00a0For the purposes of this publication, Bloomberg includes BLP, BFLP,\u00a0BISL\u00a0and\/or their affiliates.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">BISL is registered in England and Wales under registered number 08934023 and has its registered office at 3 Queen Victoria Street, London, England, EC4N 4TQ. BISL is\u00a0authorised\u00a0and regulated by the Financial Conduct Authority as a benchmark administrator.\u00a0\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u00a9 2026 Bloomberg. 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In article, we look at how shifting exposure further out the futures curve may help manage volatility after price gains.<\/p>\n","protected":false},"author":1935,"featured_media":85030,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"template-article.php","format":"standard","meta":{"_yoast_wpseo_primary_category":"540","footnotes":""},"categories":[540,453],"tags":[3794,3673,547,3842],"series":[],"class_list":["post-137633","post","type-post","status-publish","format-standard","hentry","category-commodities","category-markets","tag-commodities","tag-commodity-indices","tag-indices","tag-indices_2026","type-article"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.11 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Rethinking commodities allocation after rapid price increases | Insights | Bloomberg Professional Services<\/title>\n<meta name=\"description\" content=\"Commodities are commonly used to support diversification and guard against inflation. 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