A new survey from Credit Suisse shows that a rising number of investors expect to be overweight commodities a year from now, with fundamentally based directional trading remaining the best way to maximize returns.

Of those asked, 42% said they expect to be overweight in 12 months, up from 19% who felt the same way a year ago, while 28% said they are currently overweight commodities, according to the survey conducted at the 2014 New York City Commodities Day on Tuesday, 24 June 2014.

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The event drew a record attendance of more than 350 clients from a wide cross section of hedge funds, institutional investors, distributors, consultants, family offices and mutual funds.

"If intentions translate into action, the next 12 months could be much more positive than the preceding 12 months," said Tom Kendall, Global Head of Commodities Research at Credit Suisse. Added Oscar Bleetstein, the bank’s head of Americas Institutional Sales for Commodities, " This clearly shows that the buying interest is out there."

Some other results of the survey:

  • 53% of respondents said the best opportunity to extract alpha over the next year is in "fundamentally based directional trading."
  • 52% of participants said their rational for being in commodities was pure alpha, a percentage that’s steadily risen during the last 3 years.
  • 71% of respondents say commodity volatility will rise from record lows in the next 12 months.
  • Energy remains an investor favorite for a second-straight year, with 40% saying they see it is as the sector with the best 12-month outlook.
  • 40% identified timing as the biggest challenge for investors. This comes amid a dissipation of other traditional challenges that range from correlation with other asset classes to negative roll yield, high volatility and regulatory changes.

 

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