HardAssetsInvestor

Written by Sumit Roy  |

June 03, 2011

Commodity ETF Flows Report: Agriculture Shines. Huge Investor Interest in MOO

Details

Though overall commodity ETF flows were unspectacular last week, one fund continues to attract significant attention week after week.

Fears about a slowdown in the U.S. economy led investors to pull their capital out of commodity-related exchange-traded products last week—the fourth outflow in five weeks. Energy was the primary culprit, as the sector saw withdrawals totaling $779 million. Industrial metals and broad market (multicommodity) ETPs were hit with much more modest outflows, of $86 million and $79 million, respectively.

Investors had a fairly neutral view of precious metals last week, as the sector eked out $89 million in inflows. But the hot sector—agriculture—continued to shine, with $327 million in inflows, the fourth straight week of gains.

Importantly, one fund in particular has been responsible for this strong performance in the ag sector—the Market Vectors Agribusiness ETF (NYSE Arca: MOO). MOO has topped the inflows leaderboard for four weeks and counting, while accumulating over $1.1 billion of investor capital—$361 million of which came just last week.

But while MOO took the top inflows spot last week with a solid showing, the rest of the funds on the top-five list was rather unimpressive. iShares Gold Trust (NYSE Arca: IAU), iShares Silver Trust (NYSE Arca: SLV), ProShares Ultra Silver (NYSE Arca: AGQ) and iPath Dow Jones-UBS Commodity Subindex Total Return ETN (NYSE Arca: DJP) rounded out said list with inflows of $72 million, $62 million, $29 million and $23 million, respectively.

The outflows for the week were driven almost entirely by energy ETPs.

Energy Select Sector SPDR Fund (NYSE Arca: XLE), SPDR S&P Oil & Gas Exploration & Production ETF (NYSE Arca: XOP) and United States Oil Fund (NYSE Arca: USO) witnessed outflows of $298 million, $226 million and $111 million, respectively. Clearly, investors did not discriminate when it came to liquidating their energy ETP positions last week, as they sold both the equity-based XLE and XOP, and the futures-based USO.

Beyond energy, SPDR S&P Metals and Mining ETF (NYSE Arca: XME) and SPDR Gold Trust (NYSE Arca: GLD) took the Nos. 4 and 5 spots on the outflows leaderboard, with $102 million and $60 million, respectively, in redemptions.

Turning to price performance for the week, natural gas products dominated as the commodity rallied on inventory concerns. The United States Natural Gas Fund (NYSE Arca: UNG), United States 12 Month Natural Gas Fund (NYSE Arca: UNL) and the iPath Pure Beta Seasonal Natural Gas ETN (NYSE Arca: DCNG) provided returns of 8.42 percent, 5.66 percent and 5.6 percent, respectively.

Also in the mix was the iPath Dow Jones-UBS Cotton Subindex Total Return ETN (NYSE Arca: BAL) and the iPath Global Carbon ETN (NYSE Arca: GRN), with gains of 6.26 percent and 5.55 percent, respectively.

The bottom price performers list was quite diverse. The Elements Credit Suisse Global Warming Index ETN (NYSE Arca: GWO) and iPath Pure Beta Lead ETN (NYSE Arca: LEDD) were neck and neck, with losses of 6.93 percent and 6.51 percent, respectively. Following closely behind were the iPath Dow Jones-UBS Tin Subindex Total Return ETN (NYSE Arca: JJT), PowerShares DB Silver Fund (NYSE Arca: DBS) and the iShares Silver Trust (NYSE Arca: SLV), which shed 4.67 percent, 4.5 percent and 4.42 percent, respectively.

While we don’t often comment on the volume side of things, this week is notable for the strong interest in tin and lumber (represented by NYSEArca: WOOD and NYSEArca: JJT), both which traded 3 times their monthly average volumes just in the last week.

Fund Flows Data: May 27 – June 2, 2011

Commodity Flows By Class

Top 5 Creations (All ETFs)

Top 5 Redemptions (All ETFs)

Top 5 Weekly Performers (excluding Leverage/Inverse >1,000 Shares Traded)

Bottom 5 Weekly Performers (Excluding Leverage/Inverse >1,000 Shares Traded)

Top 5 Volume Surprises (>$50mm AUM)

Disclaimer: Data provided by IndexUniverse. All data as of 6 a.m. Eastern the date of publication. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.