BLBG: Commodity Inflows Reach August Record, Barclays Says (Update1)
Sept. 11 (Bloomberg) -- Investments in commodity products advanced to $2.63 billion last month, at least double the amount recorded for any August, with investors favoring Europe over the U.S., Barclays Capital said.
Exchange-traded products got $1.74 billion and commodity- linked mutual funds took in $472 million, the bank said in a report late yesterday. The monthly figure includes structured products. European ETPs got more than their U.S. equivalents, the second time that’s ever happened, Barclays said.
The U.S. Commodity Futures Trading Commission, the regulator, tightened trading rules and pushed enforcement of position limits amid concern that speculation drove commodity prices to record highs last year. So far, new and anticipated limits have affected the largest agricultural, natural-gas and broad-based commodity funds in the U.S.
“Continued statements (although imprecise) from the CFTC suggesting a series of regulatory actions resulted in market participants preferring to reduce their exposure to U.S. commodity markets,” Barclays said. “This manifested itself through flows into European ETPs being higher than their U.S. counterparts for the first time in a year.”
Investors also bought U.S. products perceived to have the least regulatory risk, Barclays said. Industrial-metal products got record inflows of $107 million, the bank said. The LMEX Index of six industrial metals traded on the London Metal Exchange has gained 72 percent this year.
Commodities Advance
The Reuters/Jefferies CRB Index of 19 raw materials has advanced 11 percent, rebounding from a 36 percent slump last year, the worst ever.
Deutsche Bank AG this week said it will liquidate its PowerShares DB Crude Oil Double Long Exchange Traded Notes, after announcing last week that it would close the ETN because of regulatory position limits.
Exchange-traded notes are investments through which traders can bet on the price of crude oil or other commodities without actually buying futures directly. Investors essentially buy a promissory note with the bank, which incurs a debt obligation with each purchase.
To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net
