Duluth Metals Ltd DULMF

Barclays on Cu and PGM

[zzzzz99]

Investors to raise commodity exposure -Barclays Tue Mar 9, 2010 2:08pm GMT LONDON, March 9 (Reuters) - Institutional investors looking for higher returns expect to raise their exposure to commodities this year, a Barclays Capital survey taken last week showed. The survey of 250 institutional investors attending Barclays Capital annual European commodities conference in Barcelona showed 64 percent expect commodity inflows this year to equal or exceed last year's record $70 billion. "This was a strong vote of confidence in commodity assets," Barclays said in a note sent on Tuesday. "Despite lingering concerns about the fallout from the financial crisis, investors expect commodity returns to be robust over the next five years and plan to continue raising their exposure to the asset class to new highs." Seventy-one percent said they expected annual average commodity returns of 6 percent or higher for the next five years. "Naming platinum group metals, copper and freight as the markets predicted to perform best in 2010." Sixty-five percent said they planned to increase their commodity exposure over the next three years and 79 percent said the most appropriate weight for commodities in a portfolio was 6 percent or more. Barclays said a majority of 34 percent said they favoured the flexibility and increased choice presented by exchange traded products to channel their commodities investments over the next 12 months. "This suggests a growing sophistication amongst the commodity investor base, who are eager to diversify their investment approach and customise exposures to suit their own investment objectives," Barclays said. Barclays asked investors what their biggest worry was with regard to commodity investments. "The largest portion of respondents chose a deterioration in fundamentals, compared to a significantly smaller portion which chose the impact of regulation," it said. Barclays Capital is the investment banking arm of Britain's Barclays Bank (BARC.L). (Reporting by Pratima Desai; editing by Keiron Henderson)