Nearly six full months into 2013, it is fair to say that one of the more prominent themes among ETFs has been the repudiation of commodities ETFs and ETNs. And that does not just apply to gold funds such as the SPDR Gold Shares (NYSEArca: GLD).
The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), which tracks an index comprised of a basket of commodities, has fallen 5.6% year-to-date. The Greenhaven Continuous Commodity Index (NYSEArca: GCC), an equal-weight play on 17 commodities, is off 6.5% year-to-date, indicating that investors have passed on commodities, at least for now, as inflation hedges. [A Deep Dive Into an Equal-Weight Commodities ETF]
For select individual commodities ETFs and ETNs, again extending beyond gold, things are far uglier than the aforementioned woes for diversified funds. Indicating that a legitimate commodities rebound could face numerous near-term hurdles, a fair amount of commodities funds are in bear markets, meaning declines of 20% or more from recent peaks. [List of Top Commodities ETFs]
iShares Silver Trust (NYSEArca: SLV)
The iShares Silver Trust has been battered as investors have run out of gold. At least that appears to be the easy way of explaining silver’s demise this year. Repudiation of silver because of weakness in gold makes some sense when considering that half of silver demand is tied to industrial use and U.S. economic this year has been solid for the most part.
Investors are not taking the industrial demand/silver bait. SLV has plunged 25.5% since early March and has not traded above its 200-day moving average since late February.
iPath DJ-UBS Coffee TR Sub-Indx ETN (NYSEArca: JO)
Depending upon one’s view of a security being a bear market, JO may or may not fit the bill. The coffee ETN is down about 17% this year, but over the past year, that loss jumps to over 26%. JO has not traded above its 200-day moving average in over a year and has not been above its 50-day line in a month. Those are not positive signs. [Which Cup of Joe is Right for You?]
Global X Silver Miners ETF (NYSEArca: SIL)
With SLV and spot silver prices plunging, it is not surprising that the same fate has befallen the miners and ETFs such as the Global X Silver Miners ETF. Miners have faced sky-high production costs , dealt with regrettable acquisitions and dwindling cash reserves. With that in mind, it is not surprising that SIL lost more than 26% in just the first three weeks of April. [Precious Metal Miners ETFs Worst Performers Over Past Month]
PowerShares DB Base Metals Short ETN (NYSEArca: BOS)
In a sign that not all traders are convinced about the veracity of the global economic recovery, the PowerShares DB Base Metals Short ETN is down about 15% in the past 90 days. The lost was much worse before an almost 6% gain on Monday, but it took a mere 300 shares for that move to happen. Moves like that can happen on the downside as well with any lightly traded ETF or ETN, though BOS tracking an index comprised of aluminum, copper an zinc futures is the real problem in the near-term.
iShares Silver Trust
ETF Trends editorial team contributed to this piece. Tom Lydon’s clients own shares of GLD and SIL.