Investors Shift From Betting on Growth to Bracing for Scarcity

Rising consumer prices and the threat of higher interest rates began nudging investors out of growth stocks and toward commodities-driven companies in late 2021. But the war and sanctions on Russia, a major exporter of natural resources, accelerated the shift. “The entire market was surprised at how quickly commodities were bid up,” says Seth Goldstein, an equity strategist at Morningstar Inc. Shares of fertilizer makers, oil and gas producers, and miners have soared since Feb. 23, the day before the invasion.

For years, many funds shied away from commodities because of paltry returns and growing investor attention to environmental issues. “Now that calculus has flipped,” says Rory Johnston, managing director and market economist at Price Street and author of the Commodity Context newsletter.