Commodities will take a “back seat” to other assets after the gains from 2009 to 2011 that were “built on unsustainable factors,” Citigroup analysts Jon Bergtheil and David Wilson said.
The largest broad commodities ETF, PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), tracks a basket of aluminum, brent crude, copper, corn, gold, heating oil, light crude, natural gas, RBOB gasoline, silver, soybeans, sugar, wheat and zinc. DBC has declined 11.2% over the past year.
The PowerShares DB Agriculture Fund (NYSEArca: DBA), which includes exposure to agricultural products cattle, cocoa, coffee, corn, cotton, lean hogs, live cattle, soybeans, sugar and wheat, has fallen 12.5% over the past year.
The ETFS Physical Precious Metals Basket Shares (NYSEArca: GLTR), which is backed by a basket of gold, silver, platinum and palladium bullion, is down 27.6% over the past year. The SPDR Gold Shares (NYSEArca: GLD) lost 23.9% over the last year while the iShares Silver Trust (NYSEArca: SLV) fell 37.3%. [Gold ETF Flows Reveal Speculators Have Had Enough]
On the positive side, natural gas prices have been burning up as the U.S. fights off the winter chill. The iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN (NYSEArca: GAZ) and the United States Natural Gas Fund (NYSEArca: UNG) are this year’s top two non-leveraged ETFs, rising 37.3% and 29.2% year-to-date, respectively. [Obama, Weather Lift UNG; More Gains Seen]
For more information on commodities, visit our commodity ETFs category.
For full disclosure, Tom Lydon’s clients own shares of GLD and SLV.