Key Takeaways

• Commodities trade near their lowest price relative to U.S. stocks since 1970, a gap driven by 15 years of equity outperformance.
• Real assets delivered their strongest returns when inflation ran above 6%, but were also competitive in the 2 to 6% range that covers most of modern history.
• Commodity cycles have played out over decades, not quarters, and the current drawdown is long by historical standards.

The first article in this series asked how investors ended up owning so little of the physical economy. The answer was three decades of flows into stocks and bonds, allocations that never cleared 2%, and index fund makeup that helped reduce real asset exposure over the years.

Under-ownership alone is not a reason to buy anything. In this article, we ask if there is a case for owning real assets today beyond the fact that few people do?

Commodities Remain Cheap Relative to Stocks

Measured against the S&P 500, both the S&P GSCI and the Bloomberg Commodity Index sit close to their lowest levels since 1970. The GSCI ratio is below where it started the series more than half a century ago.

Total Return Price Ratio – Commodities vs. U.S. Stocks

Source: VanEck, Bloomberg Data as of June 2026. Past performance not indicative of future results. Index descriptions included at the end of this article.

Every previous time this ratio reached comparable extremes, including the late 1990s and the early 1970s, a period of commodity outperformance followed. That is a small sample, roughly three turns in five decades, and it is not a forecast. But relative price extremes have historically been where supply discipline, capital starvation, and eventual mean reversion begin.

Commodities Have Thrived in Inflationary Environments

Sorting returns from 1970 to 2025 by U.S. inflation we are able to determine a few patterns. When inflation ran above 6%, energy producers, diversified miners, and gold miners all returned roughly 19% to 20% annually, while U.S. equities returned about 5% and bonds about 3%. That regime occurred only 18% of the time over this 55 year time horizon.

Average Annual Return of Global Resources in Varying Inflation Regimes – 1970 to 2025

Average Annual Return of Commodities in Varying Inflation Regimes – 1970 to 2025

Source: VanEck, Bloomberg, CRSP, FactSet. “Base & Industrial Metals” represented by World Bank Commodity Price Data - Metals & Minerals Index. “Diversified Miners” = MSCI ACWI Select Metals & Mining Producers ex. Gold & Silver Index from Sep-2001 to present, EMIX Global Mining ex. Gold & Energy Index from Jan-1986 to Aug-2001, and CRSP - 48 Industry Portfolios (Mines, Average Value Weighted) returns from Jan-1970 to Dec-1985. “Energy Producers” = MSCI ACWI Select Energy Producers Index from Sep-2001 to present, EMIX Global Energy Index from Jan-1986 to Aug-2001, and CRSP - 10 Industry Portfolios (Energy, Average Value Weighted) returns from Jan-1970 to Dec-1985. “Gold & Precious Metals” represented by World Bank Commodity Price Data - Precious Metals Index. “Gold Miners” = NYSE Arca Gold Miners Index from Oct-1993 to present and CRSP’s - 48 Industry Portfolios (Gold, Average Value Weighted) returns from Jan-1970 to Sep-1993. “Oil, Gas & Consumable Fuels” represented by World Bank Commodity Price Data - Energy Index. “REITs” = FTSE NAREIT All Equity REITs Index (note: index inception is Jan-1972). “U.S. Bonds” = Bloomberg U.S. Aggregate Bond Index from Jan-1976 to present, Bloomberg U.S. Aggregate Government/Credit Index from Jan-1973 to Dec-1976 and a blend of Ibbotson's SBBI U.S. 1 Year Treasury Index, U.S. Intermediate-Term Government Bond Index, U.S. Long-Term Government Bond Index, and U.S. Long-Term Corporate Bond Index series from Jan 1970 to Dec-1971. “U.S. Stocks” = S&P 500 Index. Past performance not indicative of future results. Index descriptions included at the end of this article.

In the 2 to 6% regime that covers roughly 60% of the period, diversified miners and energy producers were broadly competitive with U.S. equities rather than a drag. Real assets in that band behaved like a return source with a different driver, not merely a hedge waiting for a shock.

Commodity Cycles Have Often Lasted Decades

Commodity price history stretching back to 1800 shows long secular swings. Bear markets have run 10 to 20 years. So have the rallies between them.

Commodity Composite Price Value (Indexed at 100)

Source: VanEck, Bloomberg Data as of March 2026. Past performance not indicative of future results. Index descriptions included at the end of this article.

As the chart shows, commodity regimes turn slowly, which suggests positioning decisions in this asset class are measured in years, and that waiting for confirmation has historically meant missing a meaningful portion of the move.

What This Means for Portfolios

Real assets are priced at a multi-decade discount to U.S. equities, they carry a return profile that improves as inflation rises, and they sit in the long tail of a cycle that historically turns on a decade-plus clock.

For a portfolio that currently holds close to 1% in commodities, the question is less about conviction on the next 12 months and more about whether the current allocation reflects any view at all.

VanEck Natural Resources and Commodities Solutions

VanEck has a history of investing in natural resources and commodities for over 50 years, offering investors actively and passively managed strategies, from physical commodities to natural resource equities. We offer specialized exposure to individual sectors and diversified solutions with broad exposure across sectors and industries.

More information, including recent performance and current holdings, can be found by clicking the fund names below:

Global Resources Fund: Actively-managed approach to companies with unique competitive advantages associated with traditional commodities and those leading the development of emerging resource applications and technologies.

International Investors Gold Fund: Proven fundamental, bottom-up process emphasizes stock selection based on industry experience to access opportunities across the gold mining sector.

CM Commodity Index Fund: A passively managed fund that offers diversified commodities exposure by spreading its exposure across multiple maturities and maintaining a constant maturity per commodity to mitigate the impact of negative roll yield.

CMCI Commodity Strategy ETF: A passively managed ETF that spreads its exposure across multiple maturities to offer diversified exposure and mitigates the impact of negative roll yield by maintaining a constant maturity per commodity.

VanEck Oil Refiners ETF (CRAK): Provides exposure to an industry that may generally benefit from lower oil prices, a segment that has historically interacted differently with oil prices and market dynamics than other energy segments.

VanEck Energy Income ETF (EINC): Offers exposure to MLPs and energy infrastructure companies that have historically exhibited attractive yield characteristics without burdensome K-1 tax reporting.

VanEck Gold Miners ETF (GDX): The nation's first ETF to offer direct exposure to the gold mining industry. Gold miners have historically shown leverage to gold prices, which can amplify returns when prices rise and losses when they fall.

VanEck Junior Gold Miners ETF (GDXJ): Access to junior gold miners, including smaller exploratory or early development phase companies that are responsible for many gold reserve discoveries worldwide.

Copper and Electrification ETF (EMET): Capture companies involved in the production of the metals that enable the energy transition from fossil fuels to cleaner energy sources and technologies.

VanEck Natural Resources ETF (HAP): Offers exposure to global companies involved in six natural resources segments (including agriculture, energy, metals and renewable energy).

VanEck Agribusiness ETF (MOO): Positioned to meet growing demand as global population growth is driving increasing food demand and the need for efficient agricultural solutions.

VanEck Uranium and Nuclear ETF (NLR): Access to an important segment of the nuclear energy market, which is a significant clean energy source at an inflection point from increasing demand.

VanEck Oil Services ETF (OIH): Invests in highly liquid companies in oil services industry, including both domestic and U.S. listed foreign companies, allowing for enhanced industry representation.

VanEck Merk Gold ETF (OUNZ): Provides investors with a convenient and cost-efficient way to invest in gold through shares with the option to take physical delivery.

VanEck Real Assets ETF (RAAX): Comprehensive allocation strategy that invests across real assets and seeks to reduce volatility by responding to changing market environments.

VanEck Rare Earth and Strategic Metals ETF (REMX): Provides access to the rare earth or strategic metals industry, which supplies key inputs to many of the world’s most advanced technologies.

VanEck Steel ETF (SLX): Access to the steel industry, an industry supporting global industrialization and economic expansion.

VanEck Low Carbon Energy ETF (SMOG): Exposure to low carbon energy that includes not only solar, wind and hydro companies, but also in more recently developing areas of the market such as electric vehicles, battery tech, hydrogen and fuel cells.

VanEck Commodity Strategy ETF (PIT): Actively managed exposure to a broad basket of commodity futures.

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