* 42 pct of surveyed investors keen on overweight exposure
* 30 pct expect Brent crude at $120 and above over 12 months
By Barani Krishnan
June 26 (Reuters) - More investors plan to ramp up on commodities over the next 12 months after years of pessimism toward the sector, betting that the Iraq conflict will push oil prices higher while other commodities prices advance in volatile trade, a Credit Suisse poll showed on Thursday.
The Swiss bank said it found a favorable view developing toward commodities at a conference in New York this week, when it surveyed 350 investors, including institutions, hedge funds, family offices, mutual funds and corporate firms.
A year ago, the bank said most investors at a similar Credit Suisse conference expressed reservations on commodities.
“The majority of attendees continue to be underweight or neutral commodities,” the bank said in its latest poll.
“However, when asked ‘What do you expect your level of investment to be over the coming 12 months?', 42 percent of respondents said ‘overweight,'” Credit Suisse said, up sharply from the 19 percent who expressed such optimism in 2013.
Commodities have had a mixed year, with oil and gold prices moving higher lately after being rangebound for months.
The 19-commodity Thomson Reuters/Core Commodity CRB Index is up 11 percent on the year, after strong first-quarter gains in energy prices. The U.S. The S&P500 index for U.S. stocks is up just 6 percent.
Credit Suisse said 30 percent of the investors it surveyed expected benchmark Brent crude oil to trade at $120 a barrel and above over the next year, marking a high since April 2012.
On Thursday, Brent settled down 0.7 percent at $113.21 a barrel. A week ago, it hit a nine-month high of $115.71 on fears that fighting in Iraq could split the country and hurt oil exports.
“Most attendees appeared to view the current crude price risks as skewed to the upside”, Credit Suisse said, adding they also noted “how thin spare capacity has become in the system and the danger of further supply disruptions in Iraq or elsewhere”.
The investors were also of the view that commodities were becoming appealing again to those wanting a balanced portfolio as correlations between raw materials prices and equities had broken down, making diversification integral.
There was also “strong consensus that commodity volatility was likely to be higher” and that “fundamentals have come back to the fore” to drive prices higher, it said. (Reporting By Barani Krishnan; Editing by David Gregorio)