Investors Turn to Bond ETFs As Commodities Get Rocky

March 20, 2008 at 11:00 am by Tom Lydon      Bookmark and Share

Nailbiter Investors, feeling more skittish than ever in these "what’s going to happen next?" times, are showing signs that they’re moving money away from commodities and metals exchange traded funds (ETFs) and stocks, and into bonds.

The prices of gold and oil retreated this week – gold dipped to $900 an ounce and oil finally fell below the $100 a barrel mark, reports Rob Wherry for Smart Money. It’s quite a turnaround for the belles of the investment ball, which for weeks didn’t seem that they could make a false move.

Gold, silver and agriculture commodities ETFs are continuing to show signs of cooling off in early trading today.

On the other hand, bond funds are among those rare flashes of green when it comes to performance and investors are taking that color where they can get it these days. The markets seem to have a split personality these days, and bonds are about as safe as you can get.

Among the top performers for bond funds so far this year:

  • SPDR Lehman International Treasury Bond (BWX), up 7.4% year-to-date
  • iShares Lehman 7-10 Year Treasury (IEF), up 6.3% year-to-date
  • iShares Lehman 3-7 Year Treasury Bond (IEI), up 5.4% year-to-date
  • iShares Lehman TIPS Bond (TIP), up 4.2% year-to-date
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