REUTERS
Both gain an average of nearly 11 per cent, but managers say more positive data are needed if rally is to last
Natural resource and precious metals funds generated robust returns in September as commodity prices rose on signs of a global economic recovery.
Resource and precious metals funds both gained an average of nearly 11 per cent last month, and were among the best performers year to date, according to preliminary data released Thursday by Globe Investor.
Economically sensitive stocks have rallied because there is data confirming a rebound, said Benoît Gervais, a fund manager with Mackenzie Financial Corp., adding that there is a synchronized recovery between developed and emerging markets.
But there could be a pullback in the resource sector if there are any signs that the recovery has stalled, he cautioned in an interview.
“You need constant flow of information to confirm that the economic recovery is on, so that people have higher confidence that those stocks will make money.”
The resource sector is “like a garden, where you have flowers for all seasons,” said Mr. Gervais, who co-manages the Mackenzie Universal Canadian Resource and Mackenzie Universal World Resource funds.
Base metal and gold stocks started doing well late last fall, but energy stocks – particularly natural gas – have blossomed in September, he said.
Mr. Gervais said his funds are now overweight in the energy sector, and he sees more upside for natural gas stocks as its commodity price rises enough to allow new shale gas players to “generate significant return on capital.”
Posts
