LIVE MARKETS-Getting all your ducks in a row, or in this case, your crops

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GETTING ALL YOUR DUCKS IN A ROW, OR IN THIS CASE, YOUR CROPS

U.S. equities have struggled in February amid AI-driven disruption fears, particularly in software, and in segments of financials exposed to capital markets activity and credit. Meanwhile, global equity benchmarks have advanced year-to-date as leadership has pivoted away from the U.S. market given its heavy concentration in mega-cap growth and technology stocks.

The U.S. Treasury yield curve has shifted lower in recent weeks, but without a pronounced steepening. To Saira Malik, chief investment officer at Nuveen, this suggests markets are modestly tempering rate expectations rather than pricing in imminent cuts.

"While a lower curve can support equity multiples and help ease financial conditions, the absence of a decisive steepening implies growth expectations remain measured," writes Malik in a note.

She adds, "Such a backdrop looks favorable for investors seeking to diversify a traditional stock/bond portfolio with private real assets, including select farmland investments."

As Malik sees it, farmland, as a strategic portfolio allocation, often gets overlooked.

Within farmland, she sees particular appeal in U.S. row crops. These include agricultural commodities such as corn, cotton, rice, soybeans and wheat, along with fresh produce like potatoes, tomatoes and berries.

Basic yet versatile, she says row crops serve as "essential inputs for a range of food supply chains, consumer product goods and renewable energy markets."

According to Malik, real assets such as farmland have low or negative correlations to traditional stocks and bonds, providing potential diversification. Additionally, farmland can be an effective hedge against inflation.

(Terence Gabriel)

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