The S&P 500 has been on quite the tear. In fact, most global equities have been doing well. Over the last year, MSCI Emerging Markets Index is up 26%; the S&P is up 21% and even the MSCI Japan is up double digits, gaining 15.8%. What about taking some off the table, and buying something that’s not publicly traded instead?
U.S. Trust’s Specialty Asset Management Tea came up with a list of five investment ideas that are off-index, so to speak. They think these assets can offer opportunities to maximize value, while mitigating volatility and inflation.
Oil and Gas
U.S. Trust likes oil and gas, but did not get down to specifics in their summary report about how to buy it outside of securities and traded derivatives. There are futures and exchange traded funds like the iPath Crude Oil (OIL 28,42 0,00 0,00%) and the United States Natural Gas Fund (UNG 17,30 +0,88 +5,36%), which is a play on natural gas futures.
Farm and Ranch Land
The price of farmland continued to trend back to normalcy in 2016 and should remain on that path in the year ahead as speculators exit and a more traditional supply-demand point of view returns to the forefront, U.S. Trust’s Specialty Asset Management Team said.
Timberland
There are a number of timberland resource companies and paper and pulp firms traded in the market, but U.S. Trust’s idea is to own the land outright. Timber prices are also subject to a recovery in new home building.
Commercial Real Estate
They expect commercial real estate to perform well in 2017 due the overall economy, consumer optimism, and still very low interest rates. Domestic institutional and offshore capital has been supportive of U.S. real estate and is likely to remain the case this year. This is really a global phenomenon and savvy investors with the capital to put up into buildings will do so in worldclass cities like New York, London and Shanghai, where prices and demand remain stable even in market downturns.
Private Equity
This is all about what some in the market call the “legislative trifecta” — regulation rollbacks, tax cuts and infrastructure. Private companies in the middle market should benefit from these changes. U.S. Trust also notes “a healthier consumer and business climate, along with continued developments in technology, should spur businesses to invest” in growth.