Wealth managers: How we are playing commodities story

WEALTH MANAGERS

The case for investing in commodities has gathered momentum over the past few decades, almost as much as the Chinese consumer story, and the two are clearly interlinked.

Yet, today’s exposure to commodities in wealth manager portfolios is relatively small. Commodities’ correlation with global growth is probably the key reason for the lack of exposure and, in particular, the prospect of a hard landing for growth in China. Recent reports said hedge funds cut their commodities positions, which included exposure to oil, precious metals, base metals and cotton, by around $9bn in April due to managers’ concerns about the Chinese economy. Chinese GDP fell to 8.1% in Q1 which, while high on a global scale, was lower than analysts’ forecasts and its slowest ...