Assets under management in Commodity ETFs grew 110% to $37.2 billion according to a report issued by Deutsche Bank (DB) yesterday.
Precious metals, as a category, has long been the largest single area in terms of assets under management and currently total close to $23bn which is over 60% of all commodity assets. However, this is down from the recent peak of close to $27bn reached in mid-March of this year when precious metals represented over 72% of assets according to DB.
The bank’s analysts also noted that a key growth area has been in broad diversified indices with an increase of over 160% over the past year as investors increasingly seek to gain commodity asset class exposure rather than trading individual assets.
Although energy-related ETFs dominate trading activity, the growth and proportion of assets under management has remained relatively restrained at only $3.34bn which is less than 9% of total assets. Energy ETFs are similar in size to agriculture, which has barely any trading activity and is close to the same size in terms of assets at close to $3.2bn.
Deutsche Bank expects that commodity related ETFs will maintain their recent healthy growth rates as ETFs and ETNs offer investors ease of access to commodities at a time when the asset class has achieved considerable prominence as a diversification tool with interesting return and risk profiles
For more on investing in commodities with ETFs, see the ETF Investment Theme Commodities ETFs.