London: Commodities are likely to beat stocks and bonds this year, helping to boost investments in so-called alternative assets, according to Lehman Brothers Holdings Inc.
The 25% return from the Lehman Brothers Commodity Index “surpasses even the most optimistic finale for any other major global asset classes,” Lehman analysts, led by Jack Malvey in New York,said in a report on Thursday. This year “will crown commodities king.”
The rally in commodities, which started in 2001, has led to record prices for oil, wheat and lead this year. The gains have lured pension funds such as California Public Employees’ Retirement System, the biggest in the US, which in March invested $450 million (Rs1,769 crore) in commodities, its first such investment.
The Standard & Poor’s 500 Index of stocks has gained3.7% this year. US Treasuries have returned 7%, accordingto Merrill Lynch & Co. Inc.indexes. “The double-digit grabbing returns from commodities, and biodiesel in particular, should help fuel the strategic allocation push into alternative assets at a time of low financial asset returns; an inconvenient truth for traditional debt and equity relative return styles,” Lehman said.
The Lehman Brothers Biodiesel Index has returned 55% this year. Governments are encouraging use of alternative fuels to limit carbondioxide emissions from fossil fuels.