Investors should consider commodities because of the “big changes” associated with international expansion, VanEck CEO Jan van Eck said.
“The global economy is starting to grow again,” van Eck said on CNBC’s “ETF Edge” this week.
He singles out China, the world’s second-largest economy after the US, as a key driver of growth.
“China, which has been such a huge driver of growth and so negative for growth over the last year or two. As of March, China’s manufacturing PMI is now positive,” van Eck said. “Now you have growth… So that leads to your reflation trade.”
His firm focuses on commodities, from gold to energy to copper. Its exchange-traded funds include VanEck Gold Miners ETF (GDX) And VanEck Oil Refiners ETF (CRAK). Since the beginning of the year they have grown by 10% and 9%, respectively.
Van Eck’s best moments copperRussia’s momentum is a positive sign for demand. As of Friday’s close, prices for industrial metals had risen nearly 16% this year.
“This is a good indicator of global economic growth and energy prices. [They] They may have gotten a little ahead of themselves, but they reflect that the world is growing,” he said.
He also sees US government spending as a bullish catalyst for commodity trading.
“The budgetary costs are very high,” van Eck said. “This also leads to global trade growth. That’s why I like commodities, because I think it’s more than just a headline.”
As of Friday’s close S&P GSCI Indexwhich tracks goods from raw oil To cocoathis year has grown by 10%.