Ninety One has released the latest results of a survey of attendees at FundForum, one of the largest events for investment professionals in Europe. The second instalment of the two-part survey focuses on sentiment towards investing in commodities and natural resources.
The survey found that more than half of respondents (55 percent) are more likely to invest in commodities and natural resources in light of recent geopolitical and market events, including the conflict in Ukraine and rising inflation and interest rates. It also found that a large majority of respondents (81 percent) believe the war in Ukraine will accelerate the move towards low carbon.
Tom Nelson, Co Head of Thematic Equity and Co Portfolio Manager Global Natural Resources, Ninety One: “These results support our belief that recent events will accelerate the energy transition. The environmental urgency around the transition has been compounded by the added imperatives of energy security and reliability of supply.”
However, Nelson cautioned that, in the near term, the budgetary implications of accelerating investment in clean-energy infrastructure in Europe are extremely challenging.
Additionally, the survey gauged opinions on how the war in Ukraine may impact the price of ‘dirty’ energy industries like coal mining. Nearly half of respondents (49 percent) believe the conflict will lead to a short-term price spike, and that both low- and high-carbon energy sectors can offer compelling investments.
“The energy transition was already causing volatility. The additional impact of the conflict in Ukraine has created a market environment that will be challenging for many conventional asset classes. Against this backdrop, we believe natural resources companies can offer investors inflation protection, exposure to the energy transition and attractive valuations,” Nelson said.
“The climate emergency and the imperative to move away from Russian oil & gas will force policymakers, regulators and ultimately consumers to expedite the energy transition. We think this creates opportunities for investors. But history shows that these transitions do not happen overnight, and that investors need to position portfolios for fast-changing market conditions.”
The survey was conducted in person between 10-13 May 2022 and comprised responses from 130 fund management professionals, including fund managers, intermediaries, asset owners, consultants, and those in the distribution and asset servicing industries. FundForum was held in person in Monaco from 10-13 May 2022. Ninety One partnered with FundForum to carbon offset the event, making the conference carbon neutral.