Grantham says farmland will outperform all global assets
Grantham says farmland will outperform all global assets
By Maria Kolesnikova
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.
To contact the reporter on this story: Maria Kolesnikova in London at [email protected]
To contact the editor responsible for this story: John Deane at [email protected]