Global commodity exchange traded funds now hold a record high $189 billion in assets as investors continued to pour money into gold and cyclical commodities.
Over the first quarter of 2012, commodity ETFs added $7.5 billion in new inflows, the largest quarterly rise in almost a year, reports Tatyana Shumsky for the Wall Street Journal.
Investors invested $3.6 billion into gold ETFs and $3.1 billion into non-precious metals ETFs, the largest increase in nearly two years.
“The revival in investor risk appetite benefited a wide range of the most cyclical commodities such as copper, tin, oil, platinum, palladium, silver and broad diversifieds,” ETF Securities said in the WSJ article.
Copper ETFs attracted $248 million last quarter, the highest inflows on record. [What Materials, Copper ETFs are Saying About the Market]
“The combination of rebounding economic lead indicators, strong Chinese demand, falling [London Metal Exchange] inventories and supply issues at key mines drove the copper price higher and also stimulated strong investor demand,” ETF Securities added.
Gold, though, still holds the lions share of assets in commodity-based ETFs as investors, shaken by last year’s volatility, remain cautious. [Gold ETF Investors Unfazed by Pullback]
“Gold dominated commodity [ETF] assets under management. You had $134 billion in gold, compared to $189 billion in total,” Nicholas Brooks, head of research and investment strategy for ETF Securities, said in the article. “Most of the people who are in gold [ETFs] are in there because they’re concerned about the sovereign debt issues in the U.S. and in Europe.”