Consumer Stocks, Bitcoin Seen Winning From US-Iran Peace Deal

A US-Iran agreement to sign a peace treaty is fueling bets on a rebound in overlooked assets including Bitcoin, gold and emerging-market currencies. Consumer shares, left behind during the technology-stock rally, also stand to gain if the war ends.

On June 12, as prospects for an agreement came into view, Bank of America published an investment portfolio called “Winners of Peace.” Michael Hartnett, the bank’s chief strategist, wrote that real estate investment trusts and consumer stocks would be among the most immediate beneficiaries of an end to the conflict because both asset classes are directly exposed to falling energy prices. The Vanguard Real Estate ETF, or VNQ, rebounded to $98.51 on June 12 after dropping to $87 a share on March 27. XLY, the exchange-traded fund tracking consumer discretionary stocks, has climbed more than 10% from its April low.

Emerging-market currencies also appear undervalued. Their economies were squeezed by surging energy prices as the dollar stayed strong. The Indian rupee has fallen 5% against the dollar this year, while Indonesia’s rupiah has dropped 6.5%. Investors who buy stocks and ETFs in those markets without currency hedges could benefit from both an economic recovery and a rebound in the currencies.

Bitcoin and gold, both of which fell sharply after the war, may also be due for a reversal. Bitcoin is down 27% this year, while gold has slipped 2%.

European stocks also warrant attention because they have yet to recover to prewar levels, unlike equities in South Korea, the US and Japan, which are trading at record highs. The Wall Street Journal reported that interest in European markets is rising among investors worried the artificial-intelligence boom has gone too far.

European equities are viewed as better suited for steadier returns because they are less tied to the AI industry and offer an average annual dividend yield of 3%.

Son Ju-hyung, Hankyung.com reporter handbro@hankyung.com