InvestmentsJun 18 2014

Barings survey shows uptick in commodity demand

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Advisers are increasingly willing to recommend natural resources and commodities funds to their clients, according to a survey by Baring Asset Management.

Nearly two in five (38 per cent) of intermediaries suggested they would recommend an increase in their exposure to the sectors, up from a quarter in the previous Barometer survey and the highest for nearly three years.

The research found one in six (16 per cent) were ‘very favourable’ towards natural resources/commodities from just 6 per cent in the previous Barometer.

More than half (53 per cent) said they were currently ‘favourable’ towards global resources and commodities.

When asked about the biggest global macro-economic challenges to growth in the next six months, just one in 10 cited supply and security of global resources.

The group hired former Martin Currie global resources head Duncan Goodwin to replace Jonathan Blake last year.

Mr Blake, who left the group at the end of November 2013, was lead manager on the $541m (£319.3m) Global Resources fund and head of the global energy and materials sector team.

The group said under Mr Goodwin it had been placing “more emphasis on the bottom-up element” of stock selection and increasing the level of stock conviction on the Global Resources fund.

Mr Goodwin said at present, resources companies were “trading below historical levels and look set to revert to their long-term mean”.

“On a longer term basis, population growth will continue to drive absolute demand for natural resources, with the growing global population’s needs for energy, foods and other raw material inputs sustaining an ever rising need to boost production,” he added.

Barings has more than $900m in resources and commodity related funds.