Positive outlook for Gold
Economic recovery, inflation protection and diversification are most important drivers of commodity investment
Over two thirds of institutional investors (67%) expect the level of allocation into commodities to increase during 2021 and a further 32% expect it to stay the same. This is according to new research (1) with 150 European institutional investors and wealth managers with a combined AUM of $292.8 billion, which highlights the positive sentiment towards commodities.
The study was carried out by NTree International Ltd on behalf of investment manager China Post Global, which promotes a family of innovative 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.
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.
| Commodity | Percentage of professional investors with a positive investment outlook |
| 1. Gold | 73% |
| 2. Natural gas | 70% |
| 3. Crude oil | 62% |
| 4. Silver | 49% |
| 5. Corn | 45% |
| 6. Copper | 42% |
| 7. Cotton | 42% |
| 8. Aluminium | 36% |
| 9. Soybeans | 36% |
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%).
Timothy Harvey, CEO at NTree, comments: “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.”
Danny Dolan, Director at Market Access, said: “This research shows the strong investor sentiment across Europe towards commodities, both for their return outlook and their inflation-hedging properties. Gold and energy in particular are both at attractive entry levels in our view, as are gold mining equities.”
Market Access ETFs combine intelligent index selection, optimal replication, transparency and liquidity. They are diversified investment solutions for investors across Europe, who use Market Access ETFs to implement their investment strategy in the commodity and emerging markets space.
The Market Access Rogers International Commodity Index UCITS ETF is an exchange traded fund (ETF) whose objective is to replicate the performance of the Rogers International Commodity Index®. The Rogers International Commodity Index® tracks a basket of commodities from sectors such as energy, metals, livestock and agricultural commodities. Including 38 different commodities, the Rogers index is significantly broader than most other commodity indices. Market Access ETFs are listed in Frankfurt, Zurich and London. For more information, visit https://marketaccessetf.com/
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Notes to editors:
(1) NTree commissioned the market research company Pureprofile to interview 150 professional investors –institutional investors and wealth managers – across the UK, Switzerland and Germany. The survey was conducted online in February 2021.
NTree
NTree provides professional investors with an education and distribution service to access commodities and China through active and passive fund solutions including Exchange Traded Products. It enables investors to gain exposure to the Chinese markets, from Europe-domiciled UCITS funds through to China-listed active and passive funds, spanning equities, fixed income, PE and hedge funds.
About China Post Global
China Post Global is the promoter, distributor and investment manager of Market Access ETFs. With offices in Hong Kong and London, China Post Global is a SFC and FCA licensed investment manager with unique insight into Asian capital markets, providing portfolio management and asset allocation solutions for investors worldwide. It is the international asset management arm of China Post & Capital Fund Management Co Ltd (“China Post Fund”).
About China Post Fund
China Post Fund is a large asset manager in mainland China with assets under management of RMB 121bln. China Post Fund’s three direct owners are China Post Group, Capital Securities Co., Ltd and Sumitomo Mitsui Banking Corporation. China Post Group is one of China’s largest state-owned enterprises specialising in providing postal and financial services. Capital Securities Co., Ltd. is the brokerage arm of Capital Group, a large Chinese state-owned enterprise. Sumitomo Mitsui Banking Corporation is one of Japan’s largest investment banks, with over 28,000 employees worldwide.
For Further information, please contact Clare Anderson
clare@andersoncommsconsultancy.com
0044 7958 665883
