Tuesday, March 19, 2013

Commodity ETFs Getting Inflows after Abandonment of Gold

The boom in equities has resulted in investors abandoning gold positions as they feel safer than they have since 2008. Receiving some of that capital inflow are commodity ETFs with exposure to a wider array of materials.

According to Lipper, which tracks funds, "General Commodities Funds" received over $1 billion in February, as the price of gold has been under heavy pressure. That follows a decent January as well, where the amount was slightly over $1 billion in inflows to the general commodities funds. The February inflows were the highest in almost a year.

Precious metals funds on the other hand had outflows of just under $4 billion in February, following the $765 million in outflows in January. The $4 billion in outflows from precious metals funds was the highest since Lipper began tracking them in 2004.

The vast majority of precious metal ETF outflow was from the SPDR Gold Trust , the world's largest gold-backed ETF.

In the first couple of weeks of March, over $1 billion more in outflows from precious metals ETFs occurred.

Lipper analyst Matt Lemieux, who compiled the data, said this, "If you find gold isn't your place to be now and don't want to move all your money to equities and other high-yielding products, then the more-diversified and actively-managed General Commodities Funds might be for you."

Leading in commodity-based ETFs was PIMCO's Commodities PLUS Strategy Fund, which had inflows of $264 million in February. Behind them in second was the Fidelity Series Commodity Strategy Fund which took in just under $210 million.

For SPDR Gold, the outflow for February was $3.8 billion.

In general, precious metals ETFs have significant outflows as of March 13, with almost $1.3 billion taken out so far.

It's likely that most of this won't change too much until the disaster that is the EU is brought back into the media headlines.

It's almost inconceivable that the largest economic region in the world is being ignored, being the financial disaster it continues to be. After all, look what tiny Cypress did when the focus latched on to it.


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