Fund Managers Increasing Exposure to Copper Companies

An article from Reuters noted that some major fund managers are upping their exposure to companies focused on the red metal. According to the news outlet, data from Morningstar has shown that major natural resource funds including BGF World mining and JPM Natural Resources have boosted their exposure to copper companies in recent months.

As quoted in the publication:

Copper has lost almost a third of its value from a peak in 2011 due to a slowdown in top metals consumer China, which buys about 40 percent of global output. Copper miners’ shares represented by the Thomson Reuters GFMS pure-play copper companies index fell by almost 40 percent over the same period. Historically the shares move more sharply than the metal price and they currently look fairly priced compared with the metal, data from metals consultancy Thomson Reuters GFMS shows. This offers an attractive entry opportunity for investors with a 2-5 year view because copper’s fundamentals are expected to improve in the medium term.

Natural resources portfolio manager at Investec, George Cheveley, told Reuters:

Any investor with a longer-term horizon, ready to bear some volatility, should see the next 12 months as an opportunity to pick up copper companies, since starting from 2016 the market should be tightening up.

Click here to read the full Reuters article.