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.
Showing posts with label ETFs. Show all posts
Showing posts with label ETFs. Show all posts
Tuesday, March 19, 2013
Wednesday, September 26, 2012
Silver Now Outperforming Gold
Over the last three months, the price of silver has jumped about 25 percent, while during that same period of time, gold has performed at about half that level.
Most commodities experts have been saying that silver is highly likely to outperform gold over the next decade, as the price of gold has soared so high in the previous decade that it'll be hard to duplicate that going forward, even as more industrial demand for silver continues to grow even as silver supply is tightening.
Add to that the new practice by the Federal Reserve and ECB of initiating open-ended stimulus programs, and you have support under both metals, with silver poised to break out even more once the sellers complete their current disposal of silver assets, which has pushed the price of silver and related companies and ETFs down.
Some rightly point out that economies important to silver demand have been slowing down, with the most significant being China, but that will change if that continues to go beyond the attempts by Chinese leaders to cool off their economy, which they've been doing for some time now.
There is no doubt the Chinese will stimulate if that becomes the case, and silver demand will continue to rise, even if there is a temporary lull.
The world is now in stimulus mode, and it doesn't matter whether the demand for silver is based primarily on that reality. What's the difference if silver prices move up because of stimulus or industrial demand that is organic in nature? Either way, silver demand will rise, even though over the long term the question of sustainability rises.
But we're talking years there, not months, and so silver prices should continue to rise over time, even though, as usual, it will have a more bumpy ride than gold.
Finally, the underlying assumption and assertion by the Federal Reserve is it stands ready to stimulate even more if the jobs market doesn't improve. If that were to happen, it would assuredly give the price of silver another big boost.
Again, most of this is only a matter of when, not if. In the short term, China and Europe may weigh on the price of silver some, but once Spain caves and requests stimulus, that should change quickly, and with most investors understanding China has deliberately slowed their economy down, it won't be much of an impact on silver prices, as there are really no surprises there except for those that don't do their homework.
Silver has become a long-term investment option, and one that should be invested in that way. There is no doubt whatsoever that it will be among the strongest performing assets in the next decade, based upon industrial demand alone. Include the long-term stimulus strategy of the U.S. and Europe, and you see how that will be the case.
Thursday, March 18, 2010
J.P. Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), T. Rowe Price (Nasdaq:TROW) Launching ETFs
Investment Banks and ETFs
J.P. Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), T. Rowe Price (Nasdaq:TROW) are all looking at launching ETFs in the future, and most of these will be actively managed exchange-traded funds, built to generated higher fees than their passively-managed cousins.
ETFs continue to grow as a very popular alternative for investors, especially those who like to put their money into an investment vehicle and let it ride.
The question which remains to be answered is why someone would invest in an actively managed ETF and pay more, when they already essentially can do that with thousands of mutual funds. It makes little sense to me, but maybe investors will think there's more to it than that, and will give them a try.
These types of ETFs will take a long time to take off, and similar to other investments like them, will need to build a track record which proves they can outperform index-based ETFs. That and prove the added fees are worth the price. It'll take years for that to come about, so this is a long term play by all these companies.
J.P. Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), T. Rowe Price (Nasdaq:TROW) are all looking at launching ETFs in the future, and most of these will be actively managed exchange-traded funds, built to generated higher fees than their passively-managed cousins.
ETFs continue to grow as a very popular alternative for investors, especially those who like to put their money into an investment vehicle and let it ride.
The question which remains to be answered is why someone would invest in an actively managed ETF and pay more, when they already essentially can do that with thousands of mutual funds. It makes little sense to me, but maybe investors will think there's more to it than that, and will give them a try.
These types of ETFs will take a long time to take off, and similar to other investments like them, will need to build a track record which proves they can outperform index-based ETFs. That and prove the added fees are worth the price. It'll take years for that to come about, so this is a long term play by all these companies.
Sunday, February 14, 2010
Jefferies Launching New Commodity ETFs
Jefferies New Commodity ETFs
Jefferies is about to launch two new commodity ETFs which will be based on derivatives.
Names given the two new commodity ETFs are the Jefferies TR/J CRB Commodity Index ETF and the Jefferies Commodity Real Return ETF. Both of them will be listed on the NYSE Arca.
How the new commodity ETFs will operate is they'll invest in futures contracts for 19 specific physical commodities, including energy, soft commodities and grains.
Jefferies also runs another commodity ETF named the Jefferies TR/J CRB Wildcatters Exploration & Production Equity ETF.
Jefferies New Commodity ETFs
Jefferies is about to launch two new commodity ETFs which will be based on derivatives.
Names given the two new commodity ETFs are the Jefferies TR/J CRB Commodity Index ETF and the Jefferies Commodity Real Return ETF. Both of them will be listed on the NYSE Arca.
How the new commodity ETFs will operate is they'll invest in futures contracts for 19 specific physical commodities, including energy, soft commodities and grains.
Jefferies also runs another commodity ETF named the Jefferies TR/J CRB Wildcatters Exploration & Production Equity ETF.
Jefferies New Commodity ETFs
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
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
Monday, January 4, 2010
Investing ETF Gold Funds - 'SPDR Gold Shares'
Investing ETF Gold Funds - 'SPDR Gold Shares'
Gold will continue to be a force for some time ahead, no matter if it gets hit by a temporary surge in the value of the U.S. dollar or not. And even if it does, it won't matter, as the greenback won't be able to hold strong for a very long period of time if it happens at all, so gold will perform stongly for years into the future, even with temporary corrections in the midst of its continual upward price movement.
With that in mind, a great way to invest in gold can be through an ETF gold fund, and one of the fastest growing in the world - not with just ETF gold funds, but all ETF funds in existence - is 'SPDR Gold Shares.
An ETF gold index fund is listed on an exchange just like a stock, and so in easy to invest in, and relatively inexpensive as well, as they are not management intensive, and other than storage costs, fairly free of other fees.
Along with trading on an American exchange, SPDR Gold Shares also trades on the Tokyo Stock Exchange, Hong Kong Stock Exchange and the Singapore Stock Exchange. That exposes it to a variety of markets around the world.
At this time, the SPDR Gold Shares fund stores and underlying 1,133 metric tons of gold in the London vaults of HSBC Bank USA. That amounts to about 36,300,000 ounces with a value of close to $40.2 billion at today's gold market price.
With very few exceptions, SPDR Gold Shares of course primarily holds gold. There are few times when it holds cash as well, but that's very temporary until new buying opportunities arise.
Investing in an ETF gold index fund like SPDR Gold Shares is an easy way for investors to participate in the ongoing bull gold market, and with the ease of trading gold like a security, it eliminates many of the barriers many investors face when thinking of investing in the precious metal.
Investing ETF Gold Funds - 'SPDR Gold Shares'
Gold will continue to be a force for some time ahead, no matter if it gets hit by a temporary surge in the value of the U.S. dollar or not. And even if it does, it won't matter, as the greenback won't be able to hold strong for a very long period of time if it happens at all, so gold will perform stongly for years into the future, even with temporary corrections in the midst of its continual upward price movement.
With that in mind, a great way to invest in gold can be through an ETF gold fund, and one of the fastest growing in the world - not with just ETF gold funds, but all ETF funds in existence - is 'SPDR Gold Shares.
An ETF gold index fund is listed on an exchange just like a stock, and so in easy to invest in, and relatively inexpensive as well, as they are not management intensive, and other than storage costs, fairly free of other fees.
Along with trading on an American exchange, SPDR Gold Shares also trades on the Tokyo Stock Exchange, Hong Kong Stock Exchange and the Singapore Stock Exchange. That exposes it to a variety of markets around the world.
At this time, the SPDR Gold Shares fund stores and underlying 1,133 metric tons of gold in the London vaults of HSBC Bank USA. That amounts to about 36,300,000 ounces with a value of close to $40.2 billion at today's gold market price.
With very few exceptions, SPDR Gold Shares of course primarily holds gold. There are few times when it holds cash as well, but that's very temporary until new buying opportunities arise.
Investing in an ETF gold index fund like SPDR Gold Shares is an easy way for investors to participate in the ongoing bull gold market, and with the ease of trading gold like a security, it eliminates many of the barriers many investors face when thinking of investing in the precious metal.
Investing ETF Gold Funds - 'SPDR Gold Shares'
Tuesday, March 24, 2009
Investing in Commodity ETFs
A commodity EFT or exchange traded fund, is used to track the price of an individual commodity like silver or gold, or it could also be used to track a basket of commodities, where storage costs could play a factor, or it could buy up futures contracts.
Because commodity futures offer leverage, ETF commodity funds also place extra capital in something like an interest-bearing government bond. That way any dividends paid out can be paid out of that interest from the bonds.
The interest is also used to pay expenses incurred by the commodity ETF.
There is also another debt instrument called a commodity ETN, or exchange traded note, whose price fluctuates with the commodity index it is associated with. There are credit risks with ETNs, which are in effect senior bank notes.
In general, commodity ETFs track commodity production companies; like a mining outfit. Because of that, many factors can contribute to its performance, outside of leverage alone.
Even though we are in a temporary holding pattern for commodity demand, it will resume as soon as the global economy turns around, and then we should see years of significant profits in the overall sector.
This will make all commodity investment very alluring, along with commodity ETFs.
The emerging markets, especially China and India, although including Eastern Europe and Russia, guarantees demand won't subide any time soon, and battles over access to resources will push prices up, as the middle classes in these regions continue to grow.
One thing about commodities that must be kept in mind, is they don't generate income, so prices are the sole purpose for entering into them, including the hedging aspect of commodity prices.
Another important factor is the expenses connected to investing in commodity ETFs. Everything from trading expenses, storage of raw materials and other general charges must be taken into account in the overall picure.
Because most commodity ETFs don't tend to trade as much as regular funds, there could be fewer expenses there, but nonetheless, it has to be watched because it can definitely be the difference between failure and success, depending on the ETFs performance.
As mentioned earlier, like all commodities, a commodity ETF or ETN can offer a hedge against other factors affecting your income, and so if energy prices of some type increase significantly, you can buy into an energy ETF to offset those increase in prices, and hedge against the inflationary pressures.
Finally, whether it's a commodity ETF or ETN, there are very different treatment of taxes on gains, and you do need to consult your accountant to get the whole picture of how your investment will fare if successful.
Because commodity futures offer leverage, ETF commodity funds also place extra capital in something like an interest-bearing government bond. That way any dividends paid out can be paid out of that interest from the bonds.
The interest is also used to pay expenses incurred by the commodity ETF.
There is also another debt instrument called a commodity ETN, or exchange traded note, whose price fluctuates with the commodity index it is associated with. There are credit risks with ETNs, which are in effect senior bank notes.
In general, commodity ETFs track commodity production companies; like a mining outfit. Because of that, many factors can contribute to its performance, outside of leverage alone.
Even though we are in a temporary holding pattern for commodity demand, it will resume as soon as the global economy turns around, and then we should see years of significant profits in the overall sector.
This will make all commodity investment very alluring, along with commodity ETFs.
The emerging markets, especially China and India, although including Eastern Europe and Russia, guarantees demand won't subide any time soon, and battles over access to resources will push prices up, as the middle classes in these regions continue to grow.
One thing about commodities that must be kept in mind, is they don't generate income, so prices are the sole purpose for entering into them, including the hedging aspect of commodity prices.
Another important factor is the expenses connected to investing in commodity ETFs. Everything from trading expenses, storage of raw materials and other general charges must be taken into account in the overall picure.
Because most commodity ETFs don't tend to trade as much as regular funds, there could be fewer expenses there, but nonetheless, it has to be watched because it can definitely be the difference between failure and success, depending on the ETFs performance.
As mentioned earlier, like all commodities, a commodity ETF or ETN can offer a hedge against other factors affecting your income, and so if energy prices of some type increase significantly, you can buy into an energy ETF to offset those increase in prices, and hedge against the inflationary pressures.
Finally, whether it's a commodity ETF or ETN, there are very different treatment of taxes on gains, and you do need to consult your accountant to get the whole picture of how your investment will fare if successful.
Monday, April 7, 2008
Global Investment in Commodities Surges to $400 Billion
In the first quarter of 2008, worldwide investment in commodities surged by over 20 percent to reach the $400 billion mark, as investors fled the U.S. dollar and sought a hedge against inflation, said analysts at Citigroup Inc.
The commodity indexes also enjoyed a healthy bump, as investment in them for the first quarter increased by around $40 billion, to reach $185 billion. That was more than the entire commodity index investment of 2007.
After the indexes, trading advisors were the largest group investing in commodities, as they added $94 billion to the commodities market in the first quarter, over 18 percent since the end of 2007.
Hedge funds were next, accounting for $75 million in commodity holding, an 25 percent increase in the first quarter.
EFTs added another $46 billion to the commodity sector, increasing 31 percent since the end of the year.
Many think the surge is unsustainable, and there will probably be a general pullback over the strong recent quarter. At the same time it could offer opportunity for investors in the overall sector as well.
The commodity indexes also enjoyed a healthy bump, as investment in them for the first quarter increased by around $40 billion, to reach $185 billion. That was more than the entire commodity index investment of 2007.
After the indexes, trading advisors were the largest group investing in commodities, as they added $94 billion to the commodities market in the first quarter, over 18 percent since the end of 2007.
Hedge funds were next, accounting for $75 million in commodity holding, an 25 percent increase in the first quarter.
EFTs added another $46 billion to the commodity sector, increasing 31 percent since the end of the year.
Many think the surge is unsustainable, and there will probably be a general pullback over the strong recent quarter. At the same time it could offer opportunity for investors in the overall sector as well.
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