“Capital has been pouring into mid/large cap Canadian resource companies with sustainable dividend policies as you and David have spoken about for several years. This has come at the expense of smaller companies higher on the risk curve. Do you anticipate a shift anytime soon or do we continue to follow the flows?"

Eoin Treacy's view Thank you for this question which may be of interest to subscribers. Industrial resources prices have been in a corrective phase for the last couple of years as supply and demand came back into balance following a difficult period in the aftermath of the credit crisis. Considering the disappointment many have experienced with the sector, investors are less willing to tolerate the risks associated with developing green field sites. .

This has weighed heavily on more speculative plays where a degree of faith is required before production comes online. Companies with well-established records of production, cost control and dividend growth have obvious attractions in an otherwise uncertain environment.

In yesterday's Comment of the Day I reviewed a considerable number of commodities, noting the return to outperformance of the industrial sector. Assuming we see more than a short-term rally in commodity prices, the outlook for some of the better quality smaller companies should improve, not least because they are becoming increasingly appealing from an M&A perspective. Nevertheless, we will always be guided by the price action.