LONDON (Commodity Online): Confidence in commodities by institutional investors remains high, with 56% initiating or increasing their commodity exposure over the next three years, compared with 45% last year, according to Barclays Capital’s eighth annual survey of institutional investors.

Furthermore, nearly half of respondents expect commodity price trends to be positive this year, while only 8% expect price trends to be negative, Barclays said.

“Despite the unprecedented events of the past four years, the reasons for investing in commodities and the long-term rationale have remained consistent over time. This is a strong vote of confidence in commodity assets,” Barclays added.

According to Barclays, nearly half of the survey respondents chose portfolio diversification as their main reason for investing in commodities. One-third chose absolute returns and one-tenth cited protection from inflation.

Furthermore, investors prefer direct exposure to commodities with the favored methods being equally split between indexes, external asset managers and exchange-traded products.

Barclays stated that, “Over two-thirds of investors prefer direct commodity exposure as opposed to other methods. This figure is very similar to that of last year and indeed has changed little over the lifetime of our survey. Commodities still provide unique investment benefits.”

Investors chose crude oil (22% of respondents), gold (16%) and copper (13%) as the most likely “best performers” in 2012. However, there were divided opinions on gold as the metal also came in third place as the commodity most likely to perform worst in 2012. U.S. natural gas (31%) was picked as likely to be the worst performer, Barclays concluded