The Canadian equity market could potentially reward investors more than the S&P 500 over the next 10 years, one strategist says.

Elevated inflation and heightened commodity prices could cause the TSX to outperform the S&P 500, as both factors are likely to persist for an extended period of time, Ohsung Kwon, Canada and U.S. equity strategist at Bank of America Global Research, told BNN Bloomberg in a TV interview on Thursday.

“The TSX could potentially outperform the S&P 500 for the next decade,” he said.

Kwon pointed to past scenarios where the Canadian equity market performed better than the S&P 500 for these reasons.

“There were three upcycles in the TSX since the 1950's. It was during the 50’s, the 70’s and the early 2000's -- all of which were accompanied by either higher inflation or higher commodity prices,” he said.

He also noted that a heightened interest rate environment for a longer period of time is a bigger headwind for the S&P 500 than the TSX.

“The reason why is that that the S&P 500 is such a long duration asset compared to the TSX, that it’s sensitivity to interest rates are a lot bigger than the TSX,” he explained.  

Kwon expects inflation, high rates and elevated commodity prices to persist for quite some time.

“I’m bullish on the near-term as well as the 10-year horizon (for the TSX),” he said.