Wednesday, January 6, 2010

Commodity ETFs Double Inflows in 2009

Commodity ETFs

In 2009 commodity ETFs enjoyed a solid year, as the capital flowing into the exchange-traded funds were over double what they brought in in 2008, mirroring the growth of ETFs in general.

What was unusual in the commodity ETF sector, was that a large number of the commodity ETFs didn't perform that well, and in many cases lost huge amounts of money.

Even so, that isn't deterring investors from moving significant amounts of capital into ETFs, and 2010 looks like it'll be another banner year for them.

In 2008, commodity ETFs tookin about $13.4 billion, while in 2009 it exploded to $30.1 billion. Most of that was invested in ETFs which bet prices for agriculture, energy and metal would rise during the year.

One of the ongoing winners for ETFs was the largest commodity ETF and gold fund, SPDR Gold Trust, which continues to take advantage of increasing prices of gold, and enjoyed a 24 percent return in 2009. They should enjoy good returns for years into the future, although there will be obvious times of pullback and corrections.

To me tracking ETFs will always be the best way to invest in them, while managed ETFs not only generate more fees, but in many cases underperform because of costs, payment of management, and not really mirroring the market like an low-managed ETF will do.

Commodity ETFs

1 comment:

Anonymous said...

What a great resource!