Investors should consider commodities because of the “big change” that involves international expansion, according to VanEck CEO, Jan Van Eck.
“The global economy is starting to grow again,” Van Eck told CNBC’s “ETF Edge” this week.
He singles out China, the world's second-largest economy after the United States, as the main driver of expansion.
“China which has been a huge growth driver and very negative for growth over the last year or two. The manufacturing PMI is now positive in China as of March,” Van Eck said. “You now have growth…and that triggers your contraction trading.”
His company has exposure to commodities from gold to energy to copper. Its funds include exchange-traded funds Van Eck Gold Miners Fund (GDX) And Van Eck Refining Traded Corporation (CRAK). They are up 10% and 9% respectively since the beginning of the year.
Van Eyck highlights copperMomentum as a positive sign of demand. The industrial metal was up nearly 16% this year, through Friday's close.
“It's a good measure of global economic growth and energy prices. (They're) maybe 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 financial outlay is very high,” Van Eck said. “This leads to growth in global trade as well. That's why I love commodities because I think they're more than just a headline.”
As of close on Friday, S&P GSCI Spot Indexwhich tracks goods from Crude oil to cacaoup 10% so far this year.
