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Pensions tipped to be strong metal holders Posted: Mon, 26 Jun 2006 [miningmx.com] -- PENSION and insurance funds invested in commodities were unlikely to quit the sector notwithstanding a correction in the prices of metals, said a banker working for Goldman Sachs in Europe. “We believe this is only the start of the investment market for commodities,” said Arun Assumall, head of European investor sales for Goldman Sachs International. Assumall was speaking at the London Bullion Market Association meeting in Switzerland. Copper gained 86% between January and May; silver was 83% higher; and gold was 31% more expensive to buy over the same period. From about mid-May, however, metal prices dived. Gold, for instance, fell more than $100/oz. Assumall said that of some $110bn invested in commodities, the large majority was by insurance and pension funds which had taken up ‘long-only’ positions. This means funds thought metal prices were going to improve in the longer term. “The bulk of the $110bn is long-only, passive money,” said Assumall. Once pension and insurance funds had identified an asset class it “took a lot” for them to remove it from their benchmark, he said. “Once an asset class is included in the ‘benchmark’, it takes more than a negative market outlook to exit the asset class, although allocation can shift between 3% and 5%,” he said. Many investments were over the next three to five years,” said Assumall. About $90bn had been invested in commodities by these funds.Free news alerts: click here to subscribe
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