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Kiwi commodities missing out on inflation-hedging opportunities

Friday 7th of August 2009

Guillaume Le Fur, partner and chief executive of Swiss-based Diapason Commodities Management has been promoting commodities and meeting prospective clients in New Zealand with Louis Boulanger of investment strategist Louis Boulanger Now.

The pair say New Zealand is where Switzerland was five or six years ago in terms of commodity investment. Today the overall average asset allocation in commodities is around 15% in Europe compared to a negligible exposure to real commodities in New Zealand.

Le Fur is currently bullish on energy, base metals and the precious metals - excluding gold, which he suggests there is too much speculation around. He prefers silver which has more industrial utility. However, in the long term he believes gold will increase and may go to US$1,500 - US$2,000.

Boulanger believes interest from the New Zealand financial services industry in commodities is already on the rise as it searches for tangible assets. He adds that investors often assume they have achieved commodity exposure by buying equities such as BHP Billiton. However, this is not a true form of commodity exposure, he says.

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FMA outlines its latest expectations for advisers
Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
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Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.
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FMA outlines its latest expectations for advisers
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To correct errors in my previous post: "policies, templates, and controls" should read "policies, processes, systems and controls", and "is more conductive" should read "is more conducive".
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