VanEck Chief Executive Jan van Eck said investors should consider commodities due to “significant changes” involving international expansion.
“The world economy is starting to grow again,” Van Eck told CNBC’s “ETF Edge” this week.
He specifically pointed out that China is the world’s second largest economy after the United States and is a key driver of economic expansion.
Van Eck said: “China has been a huge driver of economic growth, but in the past year or two it has had a negative impact on economic growth. As of March, China’s manufacturing PMI was positive.” “Now the economy is growing …So, that leads to reflationary trade.”
His company is involved in commodities from gold to energy to copper.Its exchange-traded funds include VanEck Gold Miners ETF (GDX) and VanEck Refining ETF (CRAK). Year to date, they are up 10% and 9% respectively.
Van Eyck Highlights coppermomentum as a positive sign of demand. As of Friday’s close, industrial metal prices have risen nearly 16% this year.
“It’s a good indicator of global economic growth and energy prices. (They) may be a little ahead of their time, but they reflect that the world is growing,” he said.
He also sees U.S. government spending as a bullish catalyst for commodities trade.
“The fiscal expenditures are very high,” Van Eyck said. “That also leads to an increase in global trade. So, that’s why I like commodities, because I think it’s more than just a headline.”
As of Friday’s close, S&P Goldman Sachs Index Spotwhich tracks items crude arrive cocoaup 10% year to date.
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