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Commodity assets halve from 2011 peak

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Assets invested in commodity funds have halved from their peak four years ago, hitting $127bn (£80.9bn) in July, data from Lipper shows.

The assets have been hit by both outflows and underperformance of funds, as commodity prices have plummeted.

Over the past three months to July commodity funds have seen $3.2bn in outflows, with the past month alone seeing $1.7bn in outflows, the worst for any asset group.

However, over the longer term outflows have been starker, with $39.8bn leaving the funds in the past three years.

Returns on commodity funds have also disappointed, as the oil price has plummeted, along with the price of precious metals. This price drop is reflected in the market. Year to date the FTSE 350 Industrial Metals index has dropped by 38 per cent and the FTSE 350 Mining sector is down by 22 per cent.

Over four years commodity funds have made a 39.9 per cent loss, with the past year alone seeing a 27.7 per cent loss.

“All asset types posted negative average returns, with commodity funds taking the biggest hit (-8.7 per cent) due to a further drop in energy prices after settling the Iran deal and a significant decline in precious metal prices,” says Otto Christian Kober, Lipper’s global head of methodology and author of the fund flows report.

However, prospects for commodity investors do not appear to be looking up, with Rowan Dartington Signature managing director Guy Stephens saying: “Commodity prices and oil prices look like they will be staying very subdued until well into next year.”

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