Funds Fan: Scottish Mortgage's private portfolio, commodities and why bonds are back

Investment trusts face mounting pressure as private company valuations lag public markets, forcing some funds to approach their investment limits. Concurrently, the bond market has suffered alongside equities, challenging the traditional 60-40 portfolio strategy as rising interest rates and inflation drive yields higher. In the natural resources sector, Chris Korpan, manager of the JP Morgan Natural Resources fund, highlights that post-COVID demand recovery and a decade of underinvestment in mining and oil are fueling commodity price volatility. While the energy transition increases demand for base metals like copper, the sector remains cyclical, with companies prioritizing capital discipline and shareholder returns through dividends and buybacks. Investors should monitor corporate guidance closely as recessionary risks persist, potentially impacting future commodity demand and the long-term viability of current resource-heavy portfolios.