Alt Investments

Commodities Surge Ahead of Stocks in Returns Stakes

Tom Burroughes Deputy Editor London 3 July 2008

Commodities Surge Ahead of Stocks in Returns Stakes

Investments in commodities outperformed equities by an emphatic margin of 40 per cent in the first six months of this year as prices of oil, agricultural produce and precious metals continued to soar, according to data from the provider of exchange-listed funds, ETF Securities.

The ETFS All Commodities DJ-AIGCISM Exchange Traded Commodity, a listed fund tracking the DJ-AIGCISM commodities index, returned 15.6 per cent during the second quarter of this year, translating into 26.8 per cent for the first half of the year.

By contrast, S&P500 index of US equities fell into the red with negative returns of -11.9 per cent.

Of the 37 commodities and baskets of commodities to which ETF Securities provides exposure, ETFS Natural Gas was the best performing commodity during the first half of this year, showing a return of 72.7 per cent. Sixteen types of ETCs showed performance above 50 per cent.

The red-hot gains of commodity funds have inspired scores of investment firms to launch products that track commodity markets or actively buy and sell these assets. The inflow of investment funds has been cited as one of the reasons for the commodities boom, which some analysts say will eventually go into reverse.

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