AAA supports analysts readjustment of commodities ratings

Alternative Asset Analysis has announced its support for Bank of America Merrill Lynch's readjustment of its stance on commodities, preferring to favor non-cyclical commodities, such as gold, while oil has been downgraded as an alternative asset.

Alternative Asset Analysis (AAA), a research organization that advocates alternative investments, agrees with the approach from BofA Merrill Lynch Global Commodity Research team, adding that gold is retaining its reputation as a safe place to invest cash during these volatile economic times.

“As the equity markets continue to look unstable, investors are looking for alternative assets in far greater numbers, as they can offer them some diversity within their portfolios - making them less reliant on the performance of the stock markets,” stated Anthony Johnson, AAA’s analysis partner.

Fransisco Blanch of BofA Merrill Lynch said, "In response to recent disappointing macro data, the US and European debt crises and the sharp correction in risk assets, we shuffled our active indices to express a bearish view in highly cyclical commodities such as crude oil and copper."

AAA claims the downgrade of oil as an asset is fair as analysts predict that oil demand could fall by as much as 0.4 million barrels per day in 2012, as a result of the continued instability within the European and US economies.

"Adding the current uncertainty linked to the US downgrade and the European debt crisis, we find that the global economy is standing on very frail pillars,” added Mr Blanch.

AAA claims that fund managers are finding themselves under increasing pressure to find suitable alternative investments for their clients, as investors steer clear of traditional assets to minimize risk. Popular alternative asset classes include forestry projects in emerging economies, such as plantations operated by Greenwood Management in Brazil, and real estate investment in emerging economies.

“Investing in a section of forested land through a sustainable project like that run by Greenwood Management, offers fantastic opportunities for returns and also helps to reduce deforestation in one of the most densely forested regions in the world,” added Mr Johnson.

Media Contact:
Anthony Johnson
Alternative Asset Analysis
71 Commercial St
Boston, MA 02109-1320
617-939-9596