Flows into ETCs increased last week for the fifth consecutive week and the 14 th week in the pas...
Flows into ETCs increased last week for the fifth consecutive week and the 14th week in the past 15, boosting long ETC inflows to $2.9bn so far this year, according to ETF Securities (ETFS).
"This marks a record since the inception of ETCs," says Daniel Wills, senior analyst at ETF Securities. The world's first ETC was based on gold and launched in Australia by ETFS in 2003, although the ETC market properly emerged in 2006, according to Wills.
The report by ETFS shows that assets under management in ETCs have almost doubled since mid-November, due to strong flows into physically backed gold ETCs, oil ETCs as well as the more cyclically oriented commodity sectors.
Physically-backed gold ETCs saw the largest flows last week, with the combined gold holdings of ETFS Physical Gold, Gold Bullion Securities and ETFS Physical Gold listed in Australia increasing by 16,500 ounces ($14m) to 7.5 million ounces ($6.65bn). Gold holdings of these ETFs have risen by 1.4 million ounces, marking 3.7 times the inflows during the fourth quarter last year.
Flows into gold ETCs have remained strong despite the recent fall in the price of gold.
"There is a much broader trend in terms of continuing interest from institutional business which is longer term and less affected by short-term price swings," says Wills. He adds that gold prices have come a long way and were among the first to rebound since the credit crisis.
ETFS Physical Platinum experienced the largest inflows this week, increasing $13.5m over the week. Interest in industrial metals ETCs has continued to rise as cyclical assets have run strongly over the past few weeks. ETFS Industrial Metal ETCs have seen inflows of $78m since the start of this year, with cumulative inflows of up to 55% YTD.
"There is now more optimism and more risk appetite, so people are looking at growth focussed stocks, such as ETFS global shipping, steel, as well as basic resources," says Wills.
Industrial metal ETCs have proved to be the strongest performing sector in 2009, with ETFS Copper up 45%, ETFS Physical Platinum up 33%, ETFS Physical Palladium up 28% and ETFS Forward Industrial Metals up 16% since the beginning of this year.
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