VanEck CEO Jan van Eck suggests that investors should consider commodities due to significant shifts in international expansion.
Speaking on CNBC’s “ETF Edge,” van Eck emphasized the resurgence of the world economy, particularly highlighting China’s pivotal role in driving this expansion.
“China, which has been such a huge driver of growth and so negative for growth over the last year or two. Manufacturing PMI is now positive in China as of March,”
Van Eck said, underscoring the shift towards growth in the region. This, he explains, fuels what he terms as the “reflation trade.”
Van Eck’s firm has exposure to a range of commodities, including gold, energy, and copper, through various exchange-traded funds such as the VanEck Gold Miners ETF (GDX) and VanEck Oil Refiners ETF (CRAK). Year to date, these ETFs have seen gains of 10% and 9%, respectively.
Copper’s performance, according to van Eck, is particularly indicative of increased demand, with the industrial metal up almost 16% this year. He views copper as a reliable barometer for global economic growth and energy prices.
Van Eck also sees U.S. government spending as a bullish catalyst for the commodities trade.
“Fiscal spending is running so super high,”
He noted, adding that this, too, contributes to the broader trend of global growth. Therefore, he believes that commodities present an opportunity beyond mere headline speculation.
The S&P GSCI Index Spot, which tracks commodities ranging from crude oil to cocoa, has risen by 10% so far this year, indicating an upward trajectory in the commodities market.
