Is Copper a Good Hedge Against Inflation?

Okay. Is copper a good hedge against inflation, would you say? I think you could see some of that. While it's not a precious metal, there are some aspects of the copper market and critical materials in general that could lend itself to being an inflation hedge.

If you just think about the energy transition, for example, last year about $2.1 trillion was invested. That's a trend that we've seen growing fairly significantly year after year. That spending is by nature inflationary as you're pumping more dollars into a certain market.

I think it really depends where you're looking within the industry. If you're a manufacturer, somebody that's creating and manufacturing copper wires, for example, you're going to be a cost taker. So higher copper prices are going to hurt you.

We tend to look upstream in the supply chain again to those pure play miners. In that case, we expect them to benefit from higher copper prices as they pull copper out of the ground. We would expect that to have positive impacts for their financial position with the higher copper prices.

For that reason, we tend to focus on the upstream companies and don't really go downstream where you have to worry about, you know, you could have the narrative right, that you expect higher copper prices or higher demand. But based on the companies you're investing in, they might be price takers and subject to higher prices and the negative consequences of that.