AUSTRALIA – Watson Wyatt is recommending commodities, particularly energy, to its clients, according to a report citing the firm’s investment consulting head Roger Urwin.
“Watson Wyatt is recommending its clients buy up commodities, particularly energy, as well as private equity and emerging market stocks and bonds over the next few years - new areas of exposure for a majority of pension funds,” said Dow Jones Newswires.
A spokesman for the consultant said the comments fitted in with the trend for increasing portfolio diversification.
Last month a survey of investors by Barclays Capital found increasing appetite for commodities.
Urwin was also quoted as saying international markets were likely to deliver a nominal return of just 7% over the next three years. "Seven percent per annum would disappoint a lot of people but we think it is a realistic figure going forward," he said.
He was also cited as backing infrastructure as an asset class. "You could say Australia is the most switched on to infrastructure investment in the world,” he was quoted saying.
"We would say that Australian super (or pension) funds’ exposure to infrastructure has been very well timed and largely successful so far, and I would have thought it is quite a good area to be continuing to emphasize.
Australia’s Macquarie is a leading player in the infrastructure sector.
Urwin told the wire that there were valid concerns about the costs of infrastructure funds – although net returns “have actually been perfectly good".