Investors pile into commodities

Added 30th September 2016

European investors have been seeking exposure to commodities at an unprecedented scale in the first eight months of the year. Active commodity funds, however, are losing out.

Investors pile into commodities

Commodities have been one of the most popular asset classes with European investors this year.. Until the end of August, net inflows into commodity-related strategies amounted to €13.1bn, with net inflows being recorded every single month.

As commodity prices have struggled lately, after a brief revival in spring, investors who missed the boat back then have been given a new chance to speculate on a commodity price comeback. With the oil price likely to stay low for some time to come, according to the International Energy Agency, investors are likely to continue to take their chances.

However, active managers are unlikely to profit from this window of opportunity, even though they have on average outperformed the Bloomberg Commodity Index year-to-date. Nevertheless, trackers now seem to have taken over the space, and leave just the crumbs for them to pick up.

Less than 10% of this year’s net inflows went to active commodity funds. But active managers in the commodities space have not just to worry: at least they are still seeing net inflows, unlike most of their peers in other asset classes. 

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About Author

Tjibbe Hoekstra

Senior Reporter

Tjibbe joined Expert Investor as a senior reporter in March 2014. Before moving to London he worked as a financial news reporter for various news outlets in Amsterdam, including Reuters and ANP, the main news agency in the Netherlands. He also worked for Fondsnieuws, a website and magazine for finance professionals in the Netherlands. Tjibbe holds a MSc in Public Administration and a post-graduate diploma in Journalism.

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