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F&C manager rejects commodity concerns

F&C growth and income fund manager Ted Scott is dismissing fears that the commodities market is a bubble set to burst.

He says high demand has been driven principally by China and commentators arguing that the commodities market has peaked have overlooked the increase in China’s population and focused too closely on the country’s economic slowdown.

He says commodity prices in June were even lower than they are now and a positive set of interim results from mining companies in July and August sent share prices up signific-antly. He says weakness in oil and mining shares in October and early November was partly a response to the oil price fall- ing back to $55 a barrel and inevitable profit-taking after a strong run.

F&C has continued to inc-rease its exposure to resources firms, especially mining.

Scott says: “Despite fears that commodities have peaked, the demand for raw materials will continue to grow in the years ahead. High demand has been driven principally by China. The focus tends to be on the perceived slowdown in the country’s economic growth, the huge implications of demographic growth go overlooked.”

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