According to Bloomberg Commodity Index, since the beginning of 2016 the profitability of investments in raw materials amounted to 11.98 percent. The index combines the indices for 22 types of raw materials, and investments in 15 of them proved to be profitable. Yield debt market, as the Financial Times, in 2016, is about 6%, the yield of the stock market — more than 2%.
With the beginning of the year the yield commodity market increased by 19.6%, showing the strongest start since 2008. The breakthrough was made primarily due to the jump of prices for oil, gold, zinc and soybeans.
The rise of commodity markets is due to several factors. First, ended the boom of shale oil and gas in the United States: on the background of relatively low prices for raw materials the largest American producers of shale oil (Continental Resources Inc., Devon Energy Corp., Marathon Oil Corp.) back in early March, decided in 2016 to cut production by 10% compared to last year.
Flooding in Argentina and drought in Brazil has affected the harvest of soybeans and corn, respectively, spurring the market prices of these raw materials. Zinc prices are rising on expectations of lower production of this metal in China by 6% by the end of 2016, and also in connection with the decision of Glencore to cut production of zinc by one-third.
Debt markets, on the contrary, faced with the fall. According to the Bloomberg Global Developed Sovereign Bond Index, the minimum yield bonds reached 0.62 percent, the lowest level since 2010, says Bloomberg. The yield on ten-year Australian bonds reached a historic low of 2.15%, and Japanese approaches to update the record in the negative 0,135% (now is minus of 0.125%).
In 2016, investors show interest for the commodities markets, the FT notes. According to RBC Capital Markets, with the beginning of the year to April in the raw materials markets has invested $60 billion, According to eVestment, in April, hedge funds investing in raw materials, raised $1 billion.
At the same time, some large investors continue to treat the rise of raw materials market skeptical. “A small rise in commodity markets in the long term picture does not change,” — said the head of real assets consulting company Fund Evaluation Group Christian says in closing. The head of the investment division of Morgan Stanley Wealth Management Lisa of Select notes that raw material is not a monolithic asset class, different commodities are different in its specificity and has its own dynamics of supply and demand.