Investor Sentiment is a central chapter in the Mining Journal Global Finance Report 2019.
The poor returns reported would surprise few. This picture fits with results from the Best Investments chapter of the GFR, which showed a majority of market segments sampled generating negative capital gains numbers over the 12-month sample period.
The broader economic environment is also looking shaky, with fiscal headwinds in the shape of a weaker China, a trade war between that country and the US, and seasonal weakness into Christmas that is likely to hang around until into the next quarter. On top of this, the macro data suggests the commodities cycle has topped out.
But the feeling commodities equities were going to perform strongly - or at least confidence that investors had chosen wisely from the thousands of listed equities on offer - was undeniable. Around two thirds of investors were expecting better returns from mining over the coming 12-month period.
Base and precious metals continued to be the most popular commodities, though interest in battery metals has been maintained and shows few signs of softening going into the next 12 months. Uranium and mineral sands, meanwhile, emerged from the abyss showing a significant increase in investors looking for exposure.
In terms of favoured geographies, there was a move away from safe-haven jurisdictions and into some of the riskier parts of the world, at least among institutional investors. This, again, fits with the feeling of enthusiasm for the industry as five years of heavy inflows to North America and Australia start to slow. Key areas of growing interest were Africa, particularly West Africa, and East/Southeast Asia.
"The feedback from investors belies the decline in sentiment toward the industry over the past 12 months, after an uninterrupted return to form for mining commodities and equities since early 2016," head of Mining Journal Intelligence Chris Cann said.
"There are undoubtedly dark clouds hovering over the global economy but the outlook of our investor sample appears to be more focused on the equally undeniable period of underinvestment that should, at some point, prove an irresistible catalyst for higher prices."
The Investor Sentiment Survey also covers the stage of assets (exploration, development or production) to which various investors are exposed, the key investment-driver priorities (commodity, management etc), and current exposure levels to mining assets.
The GFR also aggregates and analyses public market IPOs and raisings; reviews and compares the various attributes of the key mining stock exchanges; provides a qualitative review of the alternative financing landscape; and summarises the performance of mining equities in terms of their capital gains and earnings.
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