June proved to be a strong month for commodity exchange traded funds, as assets that were lost in May were recovered. The U.S. regulated commodity funds and products had inflows of about $1.65 billion.
“It’s pretty rare for us to see dollar for dollar in recovery, given the commodities complex’s volatility, and this is probably the first time it’s happened,”Matthew Lemieux, a Lipper research analyst said.
Barani Krishnan for Reuters reports on sub-sectors of the commodity market that saw strength: [ETF Chart of the Day: Commodities]
- Precious metals funds dominated the action in both May and June — first with a net outflow of $659 million and later with a net inflow $954 million.
- General commodity funds that saw $557 million in net outflows in May only got back $88 million last month, Lipper data showed.
- Energy funds, which accounted for net inflows of $493 million in June — more than double May’s outflows of $222 million–tightened up the slack.
May outflows from the commodity sector saw total outflows of $1.65 billion, followed up by June commodity sector inflows of the same amount. The largest gold-backed ETF, SPDR Gold Shares (NYSEArca: GLD), attracted the lion’s share of assets, at $490 million in June. This month we’ve seen gold prices flounder compared to their highs and outflows from gold ETFs. [ETF Chart of the Day: Gold]
Investors have held their money in commodity ETFs even as values plunged in the second quarter. Overall, the global value of commodity ETFs fell 7%, or $13.5 billion, between April and July, reports Emerging Money.
Furthermore, the volume of investment in commodity-focused ETFs has been able to hold steady since late 2010.
Tisha Guerrero contributed to this article.
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