Additionally, commodity returns have benefited from increased “backwardation” in the futures markets where prices for near-term futures contracts are above later-dated contracts. The downward slope means investors profit when rolling futures contracts that are about to expire, essentially selling high and buying low.
Looking ahead, in a Credit Suisse survey of large investors and mutual funds, 42% of respondents said they were overweight commodities over the coming 12 months, compared to 19% last year for the same period.
“If intentions translate into action, the next 12 months could be much more positive than the proceeding twelve,” Credit Suisse said in a recent report.
For more information on the commodities market, visit our commodity ETFs category.
Max Chen contributed to this article.