A survey of 150 Barclays Capital clients has found that half expect to have more than a 10% exposure to commodities in their portfolios, a threefold increase from a similar poll carried out in 2005.
The survey took place at Barclays Capital’s third annual US Commodities Investor Conference in New York this week, polling asset managers, banks, endowments, hedge funds, insurance companies and pension funds looking for increased exposure to oil, natural gas, metals and environmental markets.
Barclays said that its investors were mostly interested in carbon emissions trading as a vehicle to gain such exposure, followed by alternative energy equities, a result which demonstrates the growing appetite for carbon trading in the United States ahead of the introduction of regional schemes.
The number of investors looking to hold commodity exposure for a maximum of six months has also more than doubled going from 11% in 2005 to 25% in 2007. “This increase denotes a greater sophistication of investor,” said Kevin Norrish, Director, and Commodities Research at Barclays Capital. “Short term tactical overlay trades have become a greater part of overall portfolio exposure.”
He noted that this year investors classed “absolute performance” as one of the most attractive aspects for investing in commodities, while portfolio diversification is no longer the most important single reason for investor interest, contrary to previous surveys.
"Investors demonstrated a high level of sophistication about commodities in this year's survey", said Benoit de Vitry, Managing Director, Head of Commodities, Emerging Markets and Quantitative Analytics at Barclays Capital. "We have seen this trend in the types of commodity products that we have developed to meet the needs of our investors, and we believe this trend will continue as the asset class grows."
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