Land Will Outperform All Global Assets
Farmland and forestry will outperform the average of all global assets long-term, according to Jeremy Grantham, chief investment strategist for Boston-based Grantham, Mayo, Van Otterloo & Co.
Energy, metals and fertilizers will gain in 10 years, Grantham wrote in a report. Copper has already doubled since the end of 2005, oil is up 35 percent and sugar gained 90 percent.
Commodities rebounded today from an eight-month low as growth in China spurs shortages of everything from copper to corn. A fund controlled by George Soros, the billionaire hedge-fund manager, owns 23 percent of South American farmland venture Adecoagro SA and hedge funds Ospraie Management LLC and Passport Capital LLC have invested in agriculture.
“For those with a long horizon, I am sure well managed forestry and farmland will outperform the average of all global assets,” according to Grantham, who correctly predicted the low in U.S. equities in 2009.
The Standard & Poor’s GSCI index of 24 commodities is little changed this year while the MSCI All-Country World Index of shares dropped 9.1 percent. U.S. Treasuries returned 6.9 percent, a Bank of America Merrill Lynch index shows. The Dollar Index is down 6.4 percent.
Federal Reserve Chairman Ben S. Bernanke vowed yesterday to keep borrowing costs at an all-time low to revive a recovery that’s “considerably slower” than expected. Cotton jumped 1.7 percent to 97.45 cents a pound by 1:47 p.m. in London and wheat jumped 2.3 percent to $7.1975 a bushel.Share
By Maria Kolesnikova