Five funds to profit as metal prices bounce back

Prices of commodities, notably base metals, have started to rise as the world rebounds from Covid-19. David Stevenson picks the five best funds to buy to take advantage.

Molten copper
Goldman Sachs estimates that mined supplies of copper could soon peak
(Image credit: © Sascha Schuermann/Getty Images)

Commodities have been in the doghouse for much of the last decade. The largest and best-performing specialist natural resources fund in this sector, BlackRock World Mining, has lost 11% of its net asset value (NAV) over the last ten years, although its share price does show a small positive gain. Commodity specialist Goehring & Rozencwajg notes that raw materials haven’t been this cheap compared to US equities since 1920.

Yet there are now signs of an incipient recovery as investors look forward to a global rebound in 2021, when demand for materials and energy products should improve. Iron-ore spot prices gained 33% between 1 January and mid-November; palladium 21%, uranium 19%, and copper 15%. Oil, despite a bounce to $50 a barrel in recent weeks, is still down by 34%, while platinum is down 6%.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.