Commodities sentiment runs high among institutional investors, new research reveals

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European institutional investors and wealth managers hold positive sentiment for commodities, a new research reveals.


Over two-thirds of respondents (67%) expect the level of allocation into commodities to increase during 2021 and a further 32% expect it to stay the same.


READ: Global Palladium Fund launches shares in four sterling-denominated exchange-traded commodities


The study was carried out by NTree International Ltd on behalf of investment manager China Post Global, which promotes a family of Exchange-Traded Funds (ETFs) providing access to commodities and emerging markets through its brand Market Access.


NTree, which has expertise in investor education and the distribution of ETFs, promotes Market Access ETFs in Europe.


It surveyed 150 professional investors across the UK, Switzerland and Germany.


When asked about the investment prospects for a range of commodities, the most positive outlook was for gold, followed by natural gas and crude oil.


The research also highlighted the most important features of commodities as part of an investment portfolio, with 68% of investors citing vaccine optimism and hopes of an economic recovery this year fuelling gains in commodity prices, followed by the protection they provide portfolios with insurance against inflation (66%), and the strong diversification benefits they provide (61%).


Other less important factors cited included the fact that, historically, many commodities are currently generationally cheap (58%) and the strong recent growth/price appreciation of commodities (55%).


“Our research shows the growing role for commodities in investment portfolios, thanks to their hedging and diversification characteristics. Many, particularly metals, have also delivered strong growth over recent years,” said Timothy Harvey, chief executive at NTree.

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