Commodities Are Cheap And Disowned

By Tiho BrkanMarket OverviewJun 02, 2014 03:24AM ET

www.investing.com/analysis/commodities-are-cheap-and-disowned-214643

Commodities Are Cheap And Disowned

By Tiho Brkan | Jun 02, 2014 03:24AM ET

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Chart 1: BRIC resource companies trading below book value right now…
BRIC Resource Companies Trading Below Book Value

The chart above is constructed with some copy and paste skills between the CRB Index from Stock Charts and Merrill Lynch valuation data on BRIC resource companies. The majority of the time, stock investors claim it is difficult to invest in alternative assets like commodities because they do not pay an income nor can they be valued like the stock market.

Well, nothing is perfect, but maybe the chart above can help one out in that department. One thing is for sure, commodities look very cheap relative to their peak in 2008 and even more so, especially relative to US equities! Confirming this low valuation is extremely underweight position on Metals & Mining sector by global fund managers. Instead, they are opting to participate in Biotech.

Chart 2: Fund managers extremely underweight Metals & Mining sector

Fund Manager Exposure To Sectors

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Central Banks

Interest Rates

Next Meeting

FED

4.50%

Mar 19, 2025

ECB

2.90%

Mar 06, 2025

BOE

4.50%

Mar 20, 2025

SNB

0.50%

Mar 20, 2025

RBA

4.10%

Apr 01, 2025

BOC

3.00%

Mar 12, 2025

RBNZ

3.75%

Apr 09, 2025

BOJ

0.50%

Mar 19, 2025

CBR

21.00%

Mar 21, 2025

RBI

6.25%

Mar 10, 2025

PBOC

3.10%

BCB

13.25%

Mar 19, 2025

US 30	42,743.0	+221.3	+0.52%
US 500	5,815.6	+37.4	+0.65%
Dow Jones	42,520.99	-670.25	-1.55%
S&P 500	5,778.15	-71.57	-1.22%
Nasdaq	18,285.16	-65.03	-0.35%
S&P 500 VIX	23.51	+0.73	+3.20%
Dollar Index	105.630	+0.120	+0.11%

Crude Oil WTI	67.84	-0.42	-0.62%
Brent Oil	70.96	-0.18	-0.25%
Natural Gas	4.300	+0.003	+0.07%
Gold	2,919.87	-0.73	-0.02%
Silver	32.475	+0.094	+0.29%
Copper	4.5698	-0.0110	-0.24%
US Soybeans	1,005.50	+3.75	+0.37%

U.S. 10Y	4.265	+0.055	+1.31%
U.S. 30Y	4.562	+0.046	+1.02%
U.S. 5Y	4.054	+0.052	+1.30%
U.S. 3M	4.323	+0.019	+0.44%
US 10Y T-Note	110.86	-0.36	-0.32%
Euro Bund	129.53	-1.82	-1.39%
10-2 Yield Spread	19.92	-1.45	-6.79%

Apple	235.93	-2.10	-0.88%
NVIDIA	115.99	+1.93	+1.69%
Alphabet A	170.92	+3.91	+2.34%
Tesla	272.04	-12.61	-4.43%
Amazon.com	203.80	-1.22	-0.60%
Netflix	972.58	-1.12	-0.12%
Meta Platforms	640.00	-15.05	-2.30%

Commodities Are Cheap And Disowned

Chart 2: Fund managers extremely underweight Metals & Mining sector

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