The April Commonwealth Bank Agri Indicators Report has revealed the agribusiness sector remains good value for investors, with a forecast total return of 36 per cent for the next 12 months.
This return is coupled with anticipated volatility of 13 per cent, according to the report, leading to the conclusion that agribusiness remains "the most attractive sector on a risk-return basis over the coming year".
The level of optimism for the sector comes despite the fact that for the first time since agribusiness investments have been monitored the monthly return fell below the broader market's 2 per cent as opposed to 6.8 per cent generated by the S&P/ASX 200 Index.
"The recovery we have seen in the broader market this past month is off the back of extended periods of extreme lows - the agribusiness sector on the other hand has continued in a steady upwards trajectory," Commonwealth Bank executive general manager of agribusiness Jon Sutton said.
"Longer term, the outlook for agribusiness is still very positive, and year-on-year it continues to significantly outperform the S&P/ASX 200."
The bank report showed the agribusiness sector generated a return of 5.2 per cent over the past three months, 24.4 per cent over the past six months, and 37.5 per cent over the past 12 months.
In comparison, the S&P/ASX 200 produced returns of negative 8.1 per cent, negative 15.6 per cent and negative 6.6 per cent for the same periods.
And interest in the sector continues to grow.
"The strong performance of this sector and its resilience in a troubled market is being recognised by market players across the globe. We have seen a definite increase in interest from international fund managers to invest in Australian agriculture," Sutton said.
