So what was the best index play on the commodities bull market in 2010?
– The Australian stock market perhaps?
– Brazil?
– The MSCI emerging markets index?
The answer is none of the above. In fact, the winner can be found much closer to home
From SocGen quant analyst Andrew Lapthorne (emphasis ours):
With the end-year approaching it is worth reflecting on the performance seen so far in 2010. There were plenty of surprises. For example the much championed BRICS has so far underperformed the S&P 500 in 2010. Indeed BRICS has only just managed to beat Belgian so far this year. And who would have thought that both Australia and Brazil would be in negative territory despite the surge in commodity prices? In fact the ideal way to have played the Commodities and Industrials surge seems to have been via the FTSE250 (up 23%), which is full of Basic Materials, Oil E&P and Engineering and contains no banks.
The humble FTSE 250 index – who would have thought it?
Take that Jim O’Neill.
Related links:
Why commodities may not be a good bet - FT Alphaville
Commodities investing is against God, apparently – FT Alphaville
Considering a commodities investor’s break-even rate - FT Alphaville