Seeking Alpha
Commodities, gold, oil & gas
Profile| Send Message|
( followers)  

By Sumit Roy

Goldman Sachs spoke and the markets listened, as investors heeded the investment bank’s advice to take profits in select commodities. In turn, $2 billion flowed out of commodity-related exchange-traded products, while overall assets in the space dropped $3.2 billion due to falling prices.

Four of the five sectors saw outflows, led by energy, where investors pulled a whopping $1.3 billion out of related ETPs. The precious metals sector came in a distant second, but still experienced a substantial $403 million in outflows. Agriculture and broad market (multicommodity) products followed, with $158 million and $145 million in outflows, respectively. The industrial metals sector managed to buck the trend, as it added $22 million of investor capital, but it remains by far the smallest of the five sectors, with a mere $4.1 billion in total assets.

Looking at individual ETPs, the largest energy ETF was responsible for virtually all of the outflows from the sector; investors ran — not walked — away from the Energy Select SPDR (XLE), as they cashed $1.4 billion out of the fund.

The precious metal heavyweights SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) took the No. 2 and 3 spots on the redemptions list despite surging prices for the underlying commodities. Profit-taking is likely to blame, as SLV’s assets in particular have increased dramatically in recent weeks.

Notably, the United States Oil Fund (USO) stopped hemorrhaging assets at the head-spinning rate of the last two weeks, but the fund still saw a meaningful $132 million in outflows. That brings the three-week total to $818 million.

Creations numbers, as one would expect, are a bit smaller. But interestingly, every one of the top five products in creations is energy-related. Thus, while investors were dumping a behemoth like the XLE, they were scooping up more-focused funds such as the SPDR S&P Oil & Gas Exploration & Production (XOP), which added $98 million in AUM. As a market-cap-weighted fund, the XLE is biased heavily toward massive integrated oil companies and the like, while the XOP provides more balanced exposure.

A competitor to XOP, the iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO), saw the second-highest inflows of the week, at $45 million. Two leveraged funds, the Direxion Daily Energy Bull 3x (ERX) and the ProShares UltraShort DJ-UBS Crude Oil (SCO), also saw solid inflows, at $44 million and $23 million, respectively. For a second week, the Alerian MLP (AMLP) took a spot on the top five creations list, as income-minded investors added $29 million of capital to the high-yield fund.

Looking at price performance for the week, it’s no surprise that silver ETPs dominated — the metal rocketed to new 31-year highs this week. But the No. 1 spot belongs to the iPath Dow Jones-UBS Natural Gas Total Return (GAZ), which advanced 7.08 percent. While natural gas did rally nicely this week, much of GAZ’s outperformance was due to the fact that the fund’s premium to its net asset value grew even further, to just shy of 20 percent.

This past week’s Bottom 5 Weekly Performers list was quite diverse. The Elements Credit Suisse Global Warming ETN (GWO), a very volatile product, fell 11.62 percent. The iPath Dow Jones-UBS Sugar Total Return ETN (SGG) and iPath Dow Jones-UBS Cotton Total Return ETN (BAL) followed, with 9.12 percent and 7.66 percent losses, respectively. Only one energy fund, the Global X Oil Equities (XOIL), made the bottom five list, with a 6.26 percent decline.

Fund Flows Data: April 8 - 14, 2011

Commodity ETF Weekly Flows By Asset Class

Net Flows ($, mm) AUM ($, mm) % of AUM
Agriculture -158.45 12,798.34 -1.24%
Broad Market -144.63 17,612.33 -0.82%
Energy -1,322.46 39,202.54 -3.37%
Industrial Metals 22.27 4,071.40 0.55%
Precious Metals -403.01 95,354.72 -0.42%
Total: -2,006.29 169,039.32 -1.19%

Top 5 Commodity ETF Creations

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
XOP SPDR S&P Oil & Gas Exploration & Production 97.81 1,197.05 8.90%
IEO iShares Dow Jones U.S. Oil & Gas Exploration & Production 44.99 576.77 8.46%
ERX Direxion Daily Energy Bull 3x 44.20 385.25 12.96%
AMLP Alerian MLP 29.47 983.51 3.09%
SCO ProShares UltraShort DJ-UBS Crude Oil 23.19 218.24 11.89%

Top 5 Commodity ETF Redemptions

Ticker Name Net Flows ($,mm) AUM ($, mm) AUM % Change
XLE Energy Select SPDR -1,366.03 9,624.30 -12.43%
GLD SPDR Gold -198.75 57,150.27 -0.35%
SLV iShares Silver -192.29 14,439.22 -1.31%
XME SPDR S&P Metals and Mining -150.38 1,350.43 -10.02%
USO United States Oil -132.09 1,684.07 -7.27%

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

Ticker Name Weekly Performance Weekly Volume AUM ($, mm)
GAZ iPath Dow Jones-UBS Natural Gas Total Return ETN 7.08% 1,619,386 110.35
DBS PowerShares DB Silver 6.07% 799,210 468.54
SLV iShares Silver 6.04% 302,061,771 14,439.22
SIVR ETFS Physical Silver 6.03% 5,865,341 780.87
USV UBS E-TRACS CMCI Silver Total Return ETN 5.72% 20,312 9.14

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

Ticker Name Weekly Performance Weekly Volume AUM ($, mm)
GWO ELEMENTS Credit Suisse Global Warming ETN -11.62% 110,802 3.69
SGG iPath Dow Jones-UBS Sugar Total Return ETN -9.12% 341,935 54.66
BAL iPath Dow Jones-UBS Cotton Total Return ETN -7.66% 859,830 263.00
XOIL Global X Oil Equities -6.26% 70,215 3.81
GRN iPath Global Carbon ETN -5.94% 23,574 3.77

Top 5 Volume Surprises (>$50mm AUM)

Ticker

Name

Average Volume (30 Day) 1 Week Average Volume % of Average
MLPL UBS E-TRACS 2X Monthly Leveraged Long Alerian MLP Infrastructure ETN 37,068 653,569 352.63%
AGOL ETFS Physical Asian Gold 3,145 49,060 312.00%
PSAU PowerShares Global Gold and Precious Metals Portfolio 6,441 77,766 241.48%
JJS iPath Dow Jones-UBS Softs Total Return ETN 163,024 1,947,945 238.98%
FAN First Trust ISE Global Wind Energy 111,852 1,293,887 231.36%

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.

Source: Weekly Commodity ETF Flows: Investors Dump XLE, Take Profits on GLD and SLV