Investment Europe: Allocations to unconventional sectors can deliver attractive returns, says Vontobel

The current low growth environment has forced investors to become more imaginative in their search for yield, Vontobel says.

Unconventional resource-sector companies within the energy sector, agriculture and advanced-materials technologies have shown considerable promise and could therefore provide the key to unlocking attractive investment potential.

The picture today
It is no secret that conventional energy and agricultural sectors have, and will continue to, face difficult times. Despite a renaissance in 2012, US production of oil has been on a steady decline for nearly four decades, a factor which has been reflected by the average oil price in 2012 being at the highest level in real terms since 1864.

In agriculture, the current ratio of grain inventories to consumption stands at record lows following several years of disappointing global production volumes; which has in turn pushed grain prices higher. Both these factors have undoubtedly constituted towards a heavy burden on the global economy.  MORE