LONDON (Bullion Street): After two witnessing growth in first two quarters of 2014, Q3 witnessed sharp fall in assets under management (AUM) of commodity Exchange Traded Funds (ETFs) worldwide lead by Gold, according to a quarterly report by ETF Securities Ltd (ETFS).
Gold ETFs accounted for nearly 60% of the decline in global commodity ETP AUM, with AUM dropping by US$7.4bn to US$69bn. Of the AUM decline, 82% was due to the gold price decline over the quarter. While investors sold into the price decline, selling was far more muted than during the price declines of 2013, indicating most tactical investors have already exited.
After gold, platinum and palladium saw the largest outflows in Q3, with US$194mn and US$74mn of outflows respectively. Silver ETPs saw the largest inflows in Q3, with US$452mn of net new investor flows despite (or perhaps because of) the sharp price decline. Many investors appear to view the silver price below US$20/oz as a good long-term accumulation level.
Net flows by Sector (US$mn)Commodity ETFs outflows totalled US$550mn in Q3 2014, with precious metal (US$1.1bn outflows) and energy ETFs (US$100mn outflows) the largest contributors. Gold was by far the standout, US$1.3bn of outflows. Platinum and diversified agriculture trailed by a large margin, recording outflows of US$194mn and US$142mn, respectively.
Livestock was also in negative territory, with US$8mn of outflows.Silver ETFs bucked the negative precious metal trend, recording US $452mn of inflows – the largest of any commodity. The next largest inflows came from diversified ETFs, with a US$366mn inflow. Industrial metal ETFs posted their third consecutive quarter of inflows, totalling US$29mn, with aluminium ETFs the largest recipients of US$35mn. Grains, corn and wheat ETFs lifted the agricultural sector from the substanstial decline inQ2, with inflows of US$74mn, US$72mn and US$69mn, respectively