67% of institutional investors expect increased allocation to commodities

Sixty-seven per cent of institutional investors expect an increase in the level of allocation to commodities in 2021, according to research by NTree International.

Research of 150 European institutional investors and wealth managers with combined assets under management of $292.8bn, also found that 32 per cent expect the level of allocation to remain the same as in 2020. NTree International carried out the survey on behalf of investment manager, China Post Global.

When asked about the investment prospects for a range of commodities, the most positive outlook was for gold (73 per cent), followed by natural gas (70 per cent) and crude oil (62 per cent).

The research also highlighted the most important features of commodities as part of an investment portfolio, with 68 per cent 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 per cent), and the strong diversification benefits they provide (61 per cent).

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

Commenting, NTree CEO, Timothy Harvey, said: “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.”

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