Commodity stocks in general and platinum miners in particular should perform well this year, while financial shares are set to slip after a recent rally, Switzerland-based Best Asset Class said.
Among mining stocks, the platinum sector has good growth potential as automakers, the top consumers of platinum group metals, will have to rebuild stockpiles sooner or later for new smaller and cleaner car models, said Bernard Loriol, partner and chief executive of the fund.
Platinum's major industrial use is in auto catalysts as it helps clean environmentally damaging fumes from motor exhausts.
China could build a strategic stockpile and investment demand could easily increase substantially, he told Reuters, adding a rise in investment in exchange traded funds (ETFs) this year could support the metal price, which could rise as high as $1,300 an ounce by end of 2009.
ETFs, backed by precious metals, saw record inflows in the first quarter of 2009 as investors sought a haven from volatility in other markets.
The world's largest platinum refiner, Johnson Matthey , said on Monday platinum prices could climb to $1,350 an ounce in the next six months if investment demand firms and Chinese jewellery buying stayed strong.
Spot platinum traded at $1,117 an ounce on Monday.
Loriol said he preferred junior miner Anooraq because of its deal with Anglo Platinum and the fact its mine, part of the third-biggest platinum deposit in the world, will have a life of 100 years.
Anooraq Resources, founded by a former executive of Harmony Gold , has negotiated a deal to buy majority control of several mines from Anglo Platinum.
The current valuation of the company (Anooraq) was $5 per ounce of the metal, compared to $20 for the other producers, he added.
Loriol said he also liked Platinum Group Metals because of the quality of its assets and preferred Aquarius as the company had performed well during the last decade and had a good balance-sheet.
Best Asset manages about $100 million and mainly invests in platinum-exploring companies located in South Africa -- the world's top platinum producer contributing about 80 percent to global production.
Loriol said investments in the banking sector remained risky due to uncertain economic conditions.
After a recent rally, financial stocks could fall again later this year, he said. The DJ STOXX European banking index doubled last week from a low in early March, but has fallen about 8 percent since May 11.
If one wants to take risks, I prefer the platinum group metals sector with good balance sheets and having the leverage underground and not in the books, he said. (Editing by Dan Lalor)
(c) Copyright Thomson Reuters 2009.