Institutional investors are less confident about the performance of commodities, according to a Barclays Capital survey.
Only 15 per cent of nearly 900 respondents expect commodities to be the best performing asset class in the coming three months. This compares to 41 per cent who expected it to perform best last time the survey was undertaken.
Commodities have plunged from being the most popular asset class in terms of potential performance to the fifth.
The asset class has fallen more than 15 per cent since early April, according to the S&P GCSI commodities index.
Barclays Capital head of global foreign exchange research Paul Robinson said: “It’s global growth that matters for commodities and we’ve seen a range of countries reporting slightly lower growth expectations. “
However, he does not believe investors are pricing in a meltdown in commodities.
“People are worried, but there’s very low conviction out there. There are many different worries, but some of these worries point in opposite directions,” he added.
According to the survey, the Chinese economy remains the biggest concern with 67 per cent of emerging market investors citing a Chinese slowdown as the biggest risk to the markets.
Indeed, a note from Credit Suisse said that China is heading for a “sluggish landing” as economic growth slows and risk to banks rises.
This is being reflected in the international markets. Copper dropped today by 1.2 per cent in early trading on the LME to $8,982 per tonne for three month delivery. Nickel, aluminium and lead also saw falls.
With European ministers putting off a decision on support for Greece until early July, the Euro fell on international exchanges weakening to $1.4198 against the dollar this morning.