Choose Picard Angst’s commodities expertise

The commodity strategies developed by Picard Angst in 2006 are extremely successful and have an attractive risk/return profile. They have been outperforming their benchmarks for years. With their intelligent composition based on economic representativeness, their optimal diversification and superior roll yield behaviour, they generate long-term outperformance with moderate volatility.

Benefits Markets Solutions Why Contact

Market Outlook

While commodities are providing outperformance in the late expansion phases of the business cycle, they have failed to live up to the reputation they gained in 2018, due to geopolitical and macroeconomic factors. Broad-based recovery is expected for 2019, thanks to robust economic growth.

Energy

The global economy is expected to grow by more than three percent in 2019. The robust state of the economy will help to normalise the inventory turnover ratio if OPEC and Russia meet their production quotas. Consequently, it is to be expected that the Brent price will gradually recover to USD 70 per barrel.

Industrial metals

After 2018's price drop, robust demand led to a reduction in the inventory turnover ratio. Demand for nickel will increase tenfold over the next eight years, driven by battery production. The outlook is also positive for copper, although the aluminium market has to contend with a headwind. Increasing supply deficits will lead to a continued recovery.

Precious metals

Underlying developments suggest that the price of gold will top USD 1400 per troy ounce in 2019. As the US Federal Reserve interest rate hikes come to an end, the dollar will gradually become weaker. Even the pressure on core inflation rates is also anticipated to reduce the opportunity cost of holding gold, due to their moderate impact on real interest rates.

Agricultural commodities

If the increase in demand remains robust for the coming year, as expected, grain reserves will diminish. Surpluses of raw sugar and Arabica coffee are still a matter of concern. However, a weaker dollar could help sound out the bottom price. Nevertheless, the sector's greatest hope lies in the resolution of the trade dispute between the US and China, which, with luck, will soon be achieved.

"2018 did not mark the end of the commodity recovery; it was just a brief bump in the road."

Dr. David-Michael Lincke, Head of Portfolio Management

Six good reasons to invest in commodities now

Business cycle

Towards the end of the expansion phase, commodities generate the best yields of all investment classes.

Inflation

Rising core inflation in the face of dwindling reserve capacity and employment growth.

Base rates

Weakening US dollar

Supplies

Stocks of many raw materials are diminishing.

Production

Production cuts in the energy sector are likely to improve the roll yield profile over the course of the year.

Geopolitics

Many actors, including the US, China Russia, Iran and Venezuela, are stoking commodities prices.

Your contact

Christopher Kumpas

CEO Picard Angst MEA

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* Past performance is not indicative of future results. Performance and risk figures are based on net asset value and are calculated without taking into account any possible additional costs or fees incurred by the investor in conjunction with the issue, redemption or swapping of fund shares.

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