JP Morgan natural resources co-fund manager Nicole Vettise says the fundamentals of the commodities market remain attractive despite the recent strong run.
Speaking at Asset TV, Vettise said demand from China and emerging markets is continuing to underpin commodity prices.
She said the fund is overweight in base metals, with a 40 per cent position, and gold, with 27 per cent. Vettise said the two have a low correlation and she is particularly up beat about uranium as an alternative energy play. Energy stocks make up 26 per cent of the fund, with the balance across a number of asset classes, including cash.
She added that the fund has a bias toward small and mid caps and prefers to hold companies for between five to 10 years. Vettise said the remainder of the fund weighting is 27 per cent in gold and 10 per cent in other areas.
She added that one gold stock had risen 300 per cent in a year despite short-term volatility and that base metals such as zinc and nickel were also benefiting from increased demand.
She added: “Growing Chinese demand for diamonds is also very exciting and shows huge potential, with reserves having halved there in the last 20 years and research showing that eight out of 10 brides in Shanghai now demand diamonds at their weddings.”