In a recent interview on CNBC’s “ETF Edge,” VanEck CEO Jan van Eck emphasized the importance of considering commodities in investment portfolios. According to van Eck, there has been a significant “big change” in the global economy, particularly with the resurgence of international expansion. China, the world’s second-largest economy, is identified as a key contributor to this expansion. After facing challenges in recent years, China is now showing signs of positive growth, with manufacturing PMI turning positive as of March.
Positive Momentum in Copper and Industrial Metals
One of the sectors that van Eck highlights in the commodities market is copper. He points out that copper’s momentum, with a nearly 16% increase this year, is a positive indicator of growing demand. Copper is considered a reliable measure of global economic growth and energy prices, reflecting the overall positive trajectory of the world economy.
Van Eck also sees U.S. government spending as a bullish catalyst for the commodities trade. With fiscal spending reaching record highs, there is a significant boost to global growth. This, combined with the positive trends in international expansion, creates a favorable environment for commodities as a strategic investment choice.
VanEck’s Exposure to Commodities
VanEck’s firm offers exposure to commodities through various exchange-traded funds, including the VanEck Gold Miners ETF (GDX) and VanEck Oil Refiners ETF (CRAK). Both of these funds have shown strong performance this year, with gains of 10% and 9% respectively. The overall positive performance of these funds, along with the growth in copper and other commodities, reinforces the potential value of including commodities in investment portfolios.
As the global economy continues to recover and expand, investors are presented with new opportunities in the commodities market. With the positive momentum in copper, strong performance of commodity-based exchange-traded funds, and bullish catalysts such as U.S. government spending, commodities offer a compelling investment option for those looking to capitalize on the current economic trends. By considering commodities as part of a diversified investment strategy, investors can position themselves to benefit from the changing landscape of the global economy.