Eric Onstad

LONDON, (Reuters) – Commodities outperformed assets this year due to a recovery after the pandemic that boosted demand. However, investors’ appetites for gold were impacted by its poor showing.

As global growth continues to accelerate, commodities which are often able to perform late in economic cycles will be competitive with equities going into 2022. Analysts said that they would remain competive with equities.

We like both commodities and equities, and have an overweight outlook for them both in 2022. Koen Straetmans is a senior multi-asset strategist at. NN (NASDAQ:) Investment Partners of the Netherlands had 298 Billion Euros ($336B) under management as of September.

The S&P Goldman Sachs (NYSE:) Commodity Index index has surged 35% this year, trumping the U.S. equity index for the first time in a decade.

The S&P 500 has gained 23%, the has added 7% while U.S. benchmark 10-year treasury bonds are down 3%.

(Graphic: Commodities Outperform other Assets in 2021, https://fingfx.thomsonreuters.com/gfx/mkt/movanqawypa/Commodities%20Outperform%20other%20Assets%20in%202021.png)

Coffee is a commodity that has risen 84%.

The benchmark oil price has risen 40% and has increased 21%, while gold fell 5% partly because of expectations for higher interest rates.

(Graphic: Most Commodity Sectors Outperform in 2021, https://fingfx.thomsonreuters.com/gfx/mkt/byprjqwqype/Most%20Commodity%20Sectors%20Outperform%20in%202021.png)

The main focus of general investors is gold, and it has been under pressure after its 25% gain in 2020. This has impacted flows into investment vehicles.

U.S. commodities exchange traded funds (ETFs), which were inflows totaling $41 billion by 2020, have experienced net outflows this year of $5.5Billion. Morgan Stanley Data from (NYSE:

(Graphic: U.S. Commodity ETFs See Outflows Despite Sector Gains, https://fingfx.thomsonreuters.com/gfx/mkt/byvrjqnydve/U.S.%20Commodity%20ETFs%20see%20outflows%20in%202021.png)

(Graphic: U.S. Equities ETFs see Surge of Inflows, https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnlyaxpq/U.S%20Equities%20ETFs%20see%20Surge%20of%20Inflows%20in%202021.png)

According to analysts, China’s top commodity purchaser China will experience a slower growth rate in 2022. But, the government can balance the crisis in the real estate sector by providing moderate stimulus.

(Graphic: Chinese Industrial Production Eases, https://fingfx.thomsonreuters.com/gfx/mkt/znpnexalqvl/China%20Industrial%20Production%20Dec%202021.png)

As logistics disruptions decrease, the global demand for commodities should rise as industry catch up to restocking. However, this could be countered by a greater supply of raw materials.

Analysts at ING stated in a note that there will be “a lot of macro headwinds” which could limit the upside potential for the commodities sector.

($1 = 0.8872 euros)