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Headstrong hopes

Headstrong hopes

Survey reveals global investors expect growth in emerging markets to remain strong and commodities to stay favourable as inflation and geopolitical concerns heighten...but not all of them. So which one?

March 30, 2011 1:41 by

About 85 percent of investors expect flows to be at or above last year’s levels and almost half are seeking returns of over 10 percent, according to Barclays Capital’s annual survey of institutional investors.

Despite (or perhaps more correctly due to) the survey being conducted during the Japanese nuclear crisis and Middle East unrest, it showed investors around the world remain bullish on commodities, with more than half increasing their commodity allocation over the next 12 months.

It also found that appetite for increased direct exposure to commodities is still high (75 percent), and that more than 60 percent of institutional investors are seeking active management strategies this year.

Strong demand from emerging markets is at the centre of these forecasts, with “booming economies of China and India will continue to drive strong demand growth for most commodities over the next ten years,” said Kevin Norrish, MD, Barclays Capital commodities research.

Investors are generally expecting “another strong year for commodities” and predicting that “heightened geopolitical concerns, turmoil in the energy markets and rising inflation concerns will continue to cast commodity assets in a favourable light,”

Oil’s well…apparently (but not so much for gold)

Crude oil is forecast to perform best while natural gas is at the other end of the spectrum, listed as the worst. Meanwhile, precious metals shows signs of lacklustre performance – despite gold coming out on top last year and that this commodity has always been seen as stable long-term investment.

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