Commodities will offer long-only investors better growth potential than any other asset over the next five years owing to a bull run in commodity prices, a fund manager claims.
Alex Moiseev, principal and chief investment officer at Dighton Capital Management, said: “Long-only investors should just own commodities across the board. There is nothing else that is worthwhile out there. Equities in some emerging markets do offer potential but they represent unknown territory because of the political factors.”
Dighton believes that fears over the real value of money resulting from excessive quantitative easing and consistent devaluing of currencies by many countries will drive up prices of precious metals while growing demand from emerging market economies will raise prices of base metals, soft commodities and oil.
Moiseev, added: “There are major lifestyle changes in emerging markets that are putting massive upside pressure on commodities, even compared with just a few years ago, but we are not seeing much increase in production. This is particularly true of oil, which I expect will go to $200 a barrel or more in the next two or three years.”
He believes the ongoing devaluation of the dollar will only support nominal prices of oil and other commodities.
©2011 funds europe