London, 22 March 2011

The latest Barclays Capital survey of commodity investor attitudes has been undertaken at a time of almost unprecedented geopolitical turmoil in the MENA region, high levels of macroeconomic uncertainty and extremely volatile energy markets as a result of the Japanese earthquake. It shows that despite difficult market conditions, historically high price levels and even after two years of exceptionally strong demand for commodity investments, enthusiasm for the asset class remains firm.

"An overwhelming majority (83%) of respondents plan to maintain or increase their commodity exposure over the next three years, few are yet close to their target allocations and most believe that weightings for commodities in a balanced portfolio should be in excess of 6%, well above current norms," according to Kevin Norrish, head of commodities at BarCap.

"Crude oil is the top pick of investors as the commodity market likely to have the strongest performance in 2011, with natural gas voted the weakest. Gold appears to be falling out of favour, however. Not a single respondent to the survey picked gold as the top performer, whilst gold was also the number two pick as worst performer.

"The replies suggest that financial market worries such as those regarding sovereign debt are now less of a concern, but are being replaced by fresh ones about geopolitics, cited as potentially the biggest positive risk factor for commodity prices this year. The effect of a China slowdown is a perennial concern for investors, and that is no different this year with over half citing this as the big downside risk for prices."

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