Commodities May Gain 10% a Year, Credit Agricole Says

Commodities May Gain 10% a Year, Credit Agricole Says
By Claudia Carpenter
April 13 (Bloomberg) -- Commodities may gain 10 percent a year this decade, outperforming the Standard & Poor’s 500 Index of stocks, according to Credit Agricole SA.
Raw materials will generate stronger returns than the annual 3.4 percent from 2000 to 2009, Jean-Francois Perrin, asset allocation analyst at Credit Agricole Corporate & Investment Bank, told reporters in London today. At the same time, though, the risk of losses will increase, he said.
The Dow Jones-UBS Commodity Index Total Return gained 19 percent last year as oil, sugar and copper climbed. The gauge slid 36 percent in the prior year as the world financial crisis cut into demand for raw materials. /
“Commodities could be more risky because they’re starting now at a point that’s not so undervalued as in 2000,” Perrin said. “While commodities are fairly priced, we think there are so many constraints on supply in the long run they will likely increase.”
Raw materials as represented by the Dow Jones-UBS gauge will be as risky as the S&P 500 through 2020 and riskier than nine other benchmarks including the MSCI BRIC Index of shares, Credit Agricole estimates. The MSCI index of shares in Brazil, Russia, India and China will rise 11 percent a year through 2020, compared with gains of 6.5 percent a year for the S&P 500, the bank said.