UK - Commodities are "back in vogue" and should make up at least 10% of a pension scheme's investment portfolio, Barclays Bank's investment arm claims.
Barclays Capital says the asset class, which accounts for about 5% of most portfolios, offers “spectacular” returns and a valuable way of diversifying a pension fund portfolio.
Its 2004 Equity Gilt Study shows that commodities enjoyed a strong performance over the past year – making it an essential part of any fund.
It says: “Due to their complexity, commodities are often viewed as a tactical investment for those with access to specialist information and expertise. In contrast, our analysis shows they make a valuable strategic contribution to any diversified portfolio of assets.”
The firm said spot commodity prices, which have been on a downtrend during the past 25 years, may have bottomed.
“The returns accruing to investors in commodities are favourable over the long-term. There is some evidence the long decline in commodity prices is now bottoming.
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