The research team at Merrill Lynch has found that global investors remain very “underweight” in their holdings of metals and mining shares, while valuations do not look stretched. This contrasts with decent fundamentals for a range of commodities: global steel prices have been rising, China has been restocking iron ore and the pace of copper destocking in the country has slowed. Yet, as they point out in a new research report, positioning in the equities has just started to adjust. The key takeaway for investors? The potential upside in the stocks more than outweighs the downside.
Some 72% of global fund managers expect a stronger global economy, the most bullish growth consensus since December of 2009. Eurozone optimism has reached nine-year high, and China expectations have bounced, especially after Monday's data. Savvy investors are seeing the worldwide growth and putting money back to work in commodities