Which Commodity ETF Saw The Largest Outflows Last Week?

| April 22, 2013 | 0 Comments

cash flowNo doubt about it, commodity ETFs saw a huge surge in trading activity last week.

However, most of this activity was of an extremely bearish nature thanks to the broad based commodity selloff that overtook the market in recent trading.

As you may know, two of the most heavily traded commodities in the marketplace -gold and oil- plunged last week.   It should come as no surprise that ETFs designed to track these physical assets saw outrageous selling as well.

Let me explain…

With gold dropping $150 an ounce early last week (in addition to the $100 decline from the week before), spooked investors are fleeing the SPDR Gold Trust (GLD).  In fact, GLD saw nearly $2.27 billion in assets erased last week.

That’s an enormous outflow of capital from GLD… 

As a whole, precious metals ETFs and ETNs saw a whopping $2.3 billion in assets shed last week… not a good sign if you’re a precious metals bull.

Of course, precious metals weren’t the only commodities that experienced heavy selling last week… 

WTI crude dropped from $91 a barrel on Monday down to a mid-week low of $86… a 5.4% nosedive within a matter of days.  The move sent $37 million of investor capital out of the US Oil Fund (USO) last week.

But that was just the start of it…

The biggest losers in the energy ETF space were the Market Vectors Oil Services (OIH) and Energy Select SPDR (XLE).  These ETFs saw $398 million and $264 million in net outflows, respectively.  As you may know, OIH and XLE hold a basket of oil industry related stocks, as opposed to commodity futures like USO.

All told, crude’s recent selloff sent energy ETF outflows surging to $1.18 billion last week.

Clearly, precious metal and crude related ETFs suffered the brunt of last week’s selling.  Their outflows made up the majority of the $4 billion pulled out of commodity ETFs last week. 

However, while the ETFs mentioned above performed poorly, there were a few glimmers of hope… 

For example, natural gas related products had a stellar week. 

The iPath DJ-UBS Natural Gas (GAZ), US Natural Gas (UNG), and US 12-month natural gas (UNL) all saw rises of between 5-7%.  Those gains came on natural gas popping to a multi-year high of $4.40 mmBtu late last week. 

What’s more, the biggest commodity ETF capital inflows for last week came from the Market Vectors Gold Miners (GDX) and the ProShares Ultra DJ-UBS Crude Oil (UCO).  Investors plowed $238 million into GDX and $68 million into UCO. 

What’s that mean?

Aggressive investors are enamored with the value created by last week’s selloff in gold and oil.  As a result, they’re using GDX and UCO to bet on a rebound in those two commodities.

What’s the takeaway from all this information?

If you’re a commodity ETF investor, you need to keep a close eye on fund inflow/outflow data.  Doing so can give you valuable insight into future price moves for specific physical assets.

I update big moves in ETF inflow/outflow data on a regular basis, so be on the lookout for additional articles!

Until Next Time,

Justin Bennett

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Category: Commodity ETFs

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.