Mar 03, 2011
ETF investors have been especially fond of energy stock ETFs. Here is a combined look at the growing popularity (and underlying appreciation) of energy equity ETFs from the 'Big 3' (SPDR, iShares and Vanguard).
But perhaps more important is the continued growth of commodity exchange-traded products. Many tactical participants consider commodites to have cleaner trending behavior than stocks and therefore somewhat easier to trade. We won't attempt to try to show this within a blog. We will point out though that there are also options markets made on commodity ETPs as another way to access these markets.
It's interesting to take a look at the amount of money being made off these growing asset bases by the providers. This has become significant. Even excluding Gold products (GLD, IAU, DBP etc...) and only using the top 13 as a sample, we see these products generating approximately $220 million in annualized fees at current (February month-end) levels. If you include GLD and others, this number more than doubles --- call it $450 million. While that sounds like a lot, consider that these products charge less than 1/2 of what mutual funds charge on a percentage basis. And mutual funds have $9 trillion in assets. (note that Vanguard has not entered the commodity ETN space or else things might be different).
By viewing assets, we see the combination of price strength and investor inflows/outflows -- which has caused this group to rise very quickly. I put these 13 together to show the growth in assets since the middle of 2009:
Finally, I used the free Backtest Portfolio Allocations App to create my own custom equal-weighted master index that shows the actual investor ETN return since the middle of 2010 (excludes USCI because its history is too short).
List of Commodity ETFs
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