Slowing global growth has stifled demand for raw materials, pushing down commodity-related exchange traded funds to multi-year lows, with one broad commodity index trading near a five-year low.
The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) has declined 7.5% over the past three-months and is hovering around its lowest since September 2010.
Additionally, the iPath Dow Jones-UBS Commodity Index Total Return ETN (NYSEArca: DJP) decreased 8.8% and the iShares GSCI Commodity-Indexed Trust (NYSEArca: GSG) fell 8.7% over the past three months.
The Bloomberg Commodity Index is at its lowest since July 2009 as Brent crude traded at its cheapest since 2012, wheat corn and soybeans also dropped to four-year lows, and gold dipped to a seven-month low, Bloomberg reports. [Bearish ETFs for Gold’s Lost Luster]
Cotton, soybean, corn and wheat all plunged into a bear market this year as U.S. farmers begin to harvest a predicted record bumper crop. [MOO-ving Out: Investors Depart Agribusiness ETFs]
The broad weakness across the commodities space has weighed on commodity ETFs. For instance, DBC includes a heavy tilt toward energy-related commodities, including Brent crude 12.7%, Light crude 13.1%, RBOB gasoline 12.7% and heating oil 12.9%, along with corn 4.3%, soybeans 5.0%, wheat 4.4% and gold 8.0%. [Poor Fundamentals Sap Energy From Oil ETFs]
Fueling the decline in prices, the Eurozone recovery stalled in the second quarter while Japan contracted by the most in over five-years. Meanwhile, U.S. crop yields at a record high, U.S. oil production is poised to reach a 45-year high due the shale boom and food prices declined to their lowest in almost four years.