Barclays Capital Expects Spike In Commodities
Barclays Capital Expects Spike In Commodities
Institutional investors are expected to increase their investments in commodities next year, according to findings from a Barclays Capital survey.
The survey was conducted at Barclays Capital’s fifth annual U.S. Commodities Investor Conference this week, which included more than 300 attendees.
Sixty-three percent of survey respondents said they plan to increase their exposure to the asset class over the next three year, compared to 60% which indicated that they have bulked up on commodities over the past 12 months.
New York City-based Barclays Capital estimates that $60 billion was invested in the asset class in 2009. Sixty-percent of survey respondents “expect the level of commodity inflows in 2010 to be $60 billion or greater,” the firm said in a Dec. 10 press release.
The selling point for most investors has been portfolio diversification and absolute returns Barclays Capital said in the statement, suggesting “a trend of increasing sophistication among commodity investors, and their desire for suitable alpha strategies.”
“As our clients add to their commodities allocations and seek favorable absolute returns, the need to be astute in selecting investments is essential,” said Joe Gold, co-head of commodities at Barclays Capital, in the release. “To achieve this goal, investors must rely on high-quality research and closely follow market fundamentals.”
The main concerns cited by survey participants regarding investing in the asset class are “a deterioration in fundamentals” and the “impact of regulation.”
Meanwhile, recent plan sponsors that have listed commodities as a potential investment going forward are the $9.8 billion Arkansas Teacher Retirement System, the $1.6 billion Fort Worth Employees’ Retirement Fund and the $125 million Manchester Employees’ Contributory Retirement System.
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