How vulnerable are natural resources to a pullback?

Especially with China remaining uncertain

The outperformance of the natural resources sector so far this year has caught many investors unaware, causing pain to the relative performance of portfolios, writes Olivia Markham, manager on the BLK Commodities Income investment trust.

The S&P Global Natural Resources index has returned 22%, while the S&P 500 and the MSCI World have only risen 4%. None-the-less, positioning surveys suggest investors remain cautious of the sector, given several years of severe underperformance, and the sector continues to be underowned relative to history. The resources sector's performance year-to-date has been driven by commodity prices bouncing off the multi-year lows we saw at the end of 2015, with Brent oil, gold and iron ore prices up 27%, 23% and 38% for example. Oil jumps 6% as OPEC surprises with production cut Sentiment ...