Weekly Commodity ETF Flows Report: SLV Outflows Confirm Investor Exodus

by: Hard Assets Investor

Investors ran—not walked—away from commodity-related investments this week, as over the past five sessions, the S&P GSCI Index fell the most since 2008. We saw silver plunge over 30 percent in a matter of days, while crude oil crumbled by almost $10/barrel in a single session.

Rather than any single news or economic event, the primary culprit seemed to be an unwinding of the extremely crowded trade in commodities. This exodus from commodities was very much evident in this week’s ETP flows data, which shows that investors pulled out a whopping $3.4 billion from the space. After including losses from capital depreciation, total assets in commodity-related ETPs fell a stunning $15 billion over the course of the week, ending at $164 billion.

Four of the five sectors saw investor withdrawals. Precious metals, unsurprisingly, led with $2 billion in outflows. The energy, agriculture and broad market sectors followed with $1.1 billion, $193 million and $71 million in outflows, respectively. Industrial metals ETPs bucked the trend, managing to attract $25 million of investor capital, despite the poor performance in base metals prices during the week.

Individual ETP performance mirrored sector performance, with precious metals and energy funds dominating the action. Once again, we saw the ProShares UltraShort Silver (NYSE Arca: ZSL) make the top inflows leaderboard, this time taking the top spot, with $138 million in inflows. Assets into this leveraged short product have ballooned from $118 million to $694 million over the past month, as traders sought to time the top in silver prices.

Interestingly, the iShares Gold Trust (NYSE Arca: IAU) and the PowerShares DB Precious Metals Fund (NYSE Arca: DBP) also made the inflows leaderboard this week, as investors added $94 million and $62 million, respectively, to the funds. IAU offers long exposure to physical gold, while DBP invests in gold and silver futures contracts.

Finally, the PowerShares DB Energy Fund (NYSE Arca: DBE) and the Alerian MLP ETF (NYSE Arca: AMLP) round out the top five, with $33 million and $27 million in inflows, respectively. The latter has been attracting a steady stream of capital, as investors consider high-yield master limited partnerships a conservative way to gain energy exposure.

Turning to the outflow leaders this week, the two behemoths in the precious metals space—the SPDR Gold Trust (NYSE Arca: GLD) and the iShares Silver Trust (NYSE Arca: SLV)—saw enormous investor withdrawals, of $1 billion and $1.1 billion, respectively. GLD’s performance contrasts with that of lower-cost rival IAU mentioned above, but it’s more in line with what we would expect, given the downward trajectory of gold prices this week. SLV was the big story of the week though, as the outflows from the fund offer a strong explanation for why silver prices plummeted in the period.

Meanwhile, United States Natural Gas Fund (NYSE Arca: UNG) saw big moves of its own, as investors pulled out $220 million from the fund. Rounding out the top five, the PowerShares DB Agriculture Fund (NYSE Arca: DBA) lost $179 million of investor capital.

Switching gears and taking a look at price performance for the week, we see that not a single ETP posted a positive return in the period. The iPath Pure Beta Aluminum ETN (NYSE Arca: FOIL) fared the best, as it lost only 0.02 percent.

As for the worst price performers of the week, every product was silver-related. The UBS E-TRACS CMCI Silver Total Return ETN (NYSE Arca: USV), PowerShares DB Silver Fund (NYSE Arca: DBS), iShares Silver Trust (NYSE Arca: SLV), ETFS Physical Silver Shares (NYSE Arca: SIVR) and ETFS Physical White Metals Basket Shares (NYSE Arca: WITE) saw losses of 30.82 percent, 28.95 percent, 28.65 percent, 28.63 percent and 21.18 percent, respectively.

Fund Flows Data: April 29 - May 5, 2011

Commodity ETF Weekly Flows By Asset Class

Net Flows
($, mm)
% of AUM
Agriculture -193.48 11,928.06 -1.62%
Broad Market -70.94 16,624.50 -0.43%
Energy -1,091.68 36,563.55 -2.99%
Industrial Metals 24.64 3,900.51 0.63%
Precious Metals -2,023.50 95,207.53 -2.13%
Total: -3,354.97 164,224.15 -2.04%

Top 5 Commodity ETF Creations

Ticker Name Net Flows
($, mm)
AUM % Change
ZSL ProShares UltraShort Silver 138.11 694.35 24.83%
IAU iShares Gold Trust 94.46 6,624.29 1.45%
DBP PowerShares DB Precious Metals 61.64 584.05 11.80%
DBE PowerShares DB Energy 32.86 248.84 15.21%
AMLP Alerian MLP 27.17 1,052.62 2.65%

Top 5 Commodity ETF Redemptions

Ticker Name Net Flows
($, mm)
AUM % Change
SLV iShares Silver -1,054.58 12,490.34 -7.79%
GLD SPDR Gold -1,040.28 58,680.42 -1.74%
XLE Energy Select SPDR -558.39 9,134.14 -5.76%
UNG United States Natural Gas -219.76 1,865.88 -10.54%
DBA PowerShares DB Agriculture -178.94 3,453.95 -4.93%

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

Ticker Name Weekly
Weekly Volume AUM
($, mm)
FOIL iPath Pure Beta Aluminum ETN -0.02% 21,700 4.43
UBG UBS E-TRACS CMCI Gold Total Return ETN -0.15% 13,679 7.46
HEVY iPath Pure Beta Industrial Metals ETN -0.66% 12,800 4.67
CUPM iPath Pure Beta Copper ETN -1.31% 16,500 4.70
NUCL iShares S&P Global Nuclear Energy -1.37% 19,418 17.68

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

Ticker Name Weekly
Weekly Volume AUM
($, mm)
USV UBS E-TRACS CMCI Silver Total Return ETN -30.82% 102,649 9.23
DBS PowerShares DB Silver -28.95% 3,433,154 367.99
SLV iShares Silver -28.65% 1,177,115,685 12,490.34
SIVR ETFS Physical Silver -28.63% 19,082,252 673.72
WITE ETFS Physical WM Basket -21.18% 844,064 58.46

Top 5 Volume Surprises (>$50mm AUM)

Ticker Name Average Volume
(30 Day)
1 Week Average Volume % of Average
JO iPath Dow Jones-UBS Coffee Total Return ETN 88,734 2,803,363 631.86%
JJA iPath Dow Jones UBS Agriculture Total Return ETN 160,437 3,883,216 484.08%
PSAU PowerShares Global Gold and Precious Metals Portfolio 9,948 226,931 456.26%
GSC GS Connect S&P GSCI Enhanced Commodity Total Return Strategy ETN 14,324 254,297 355.07%
GLTR ETFS Physical Precious Metal Basket Shares 73,880 1,283,580 347.48%

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.