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Copper set to climb even higher, pension funds reckon

49% of surveyed institutions were looking to overweight their exposure to copper, compared to 21% who expect to be underweight over the next 12 months.

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Many pension funds are betting that copper will become an even more attractive investment and prices will rise during the remainder of this year, according to new research. 

The orange metal is known as Dr Copper for its ability to 'predict' the global fluctuations in economic activity and is also becoming an indispensable commodity due to its use in clean energy and green tech.

A survey of 150 European pension funds with combined assets under management of $213bn, carried out by Global Palladium Fund (GPF), found that 81% of pension funds think that rising inflation and economic growth will make copper an even more appealing metal for professional investors.

What's more, 49% of polled institutions were looking to overweight their exposure to copper, compared to 21% who expect to be underweight over the next 12 months.

As for the price of copper, 45% of funds anticipate it will be between 3% and 9% higher by the end of the year compared to its value in mid-April, 37% think it will end the year even higher than this, while 17% of the funds expect it to up to 3% higher.

“Copper prices are positively correlated to inflation, and it is one of the best performing assets during inflationary periods," said Alexander Stoyanov, chief executive of GPF. 

"Strong economic growth is fuelling demand for the metal, and cleantech and renewables projects, as well as infrastructure development, represent significant growth opportunities for copper.”

Stoyanov said: “Copper has a fundamental role to play in enabling economic growth and the transition to green energy. Our study shows that European pensions funds are set to take advantage of this and view copper as an attractive investment. Our unique physically-backed copper ETC offers them the opportunity to access this vital commodity at extremely competitive rates.”

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