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ETF Securities, a leading provider of exchange-traded commodities (ETCs), has published a survey concluding that investors will continue to invest in commodities in 2014, with cyclical commodities such as platinum, palladium and industrial metals remaining favourites.
The results were compiled from a survey of 450 investment professionals conducted during the ETF Securities annual commodity investment conferences which took place in Frankfurt, London, Milan and Zurich last month.
Polled attendees remarked that commodities remained a favoured asset class in 2014, with nearly 20% of those polled ranking commodities as one of their top three picks.
Cyclical commodities, especially industrial metals were favoured by investors. Platinum, copper and silver were the top three individual picks with platinum coming out well on top with 31% choosing it as their favourite, followed by copper at 26%. Silver followed suit with an average of 15% choosing it as a top performer in 2014. Gold also saw strong interest (with 13%) concluding the metal is still seen as a hedge against potential growth and financial risks in 2014.
The results confirm earlier predictions that if global economic growth remains on track, commodity performance will follow. Platinum and silver exchange-traded products (ETPs) received the largest inflows in 2013 with $1.3 billion and $841 million respectively as investors shifted away from gold towards commodities more positively correlated with the global industrial cycle.
The two biggest risks investors see in 2014 according to the survey results are (i) a negative financial market response to continued Fed tapering and (ii) slower growth than the consensus is now forecasting, with an average of 20% worried about recovery in the United States and 21% most worried about China.
Commenting on the findings, Nicholas Brooks, Head of Research and Investment Strategy at ETF Securities, said: “Most investors we surveyed indicated they are positive on the outlook for global growth in 2014, with the US leading the way. This likely explains their general bullishness towards broad commodities after three years of underperformance, with platinum and copper top picks. Gold also scored well, reflecting investors’ recognition that if the consensus growth story proves wrong, gold will likely perform.”
ETF Securities is headquartered in London and has approximately $18 billion in assets under management.