A look at investment flows in the world of commodities-related ETFs.
[This feature originally appeared on HardAssetsInvestor.com, and is published here with permission.]
Editor's note: This week, ETF Flows focuses on year-end results for 2011. However, the weekly ETF flows charts appear at the bottom of the story. Next week we will return to our weekly snapshot.
An 11th-straight year of gains in gold helped keep investors interested in commodity-related exchange-traded products in 2011. Altogether, commodity ETPs saw net inflows of $10 billion, taking total assets to $152 billion. Exchange-traded products (ETPs) include exchange-traded funds (ETFs), exchange-traded vehicles (ETVs) and exchange-traded notes (ETNs).
The gain was thanks to a solid $5.9 billion inflow into precious metals ETPs, which now have assets totaling $98.5 billion. But agriculture was the best performer on a percentage basis, as inflows totaled $3.5 billion, sending total assets to $10.5 billion.
Broad market (multicommodity) and industrial metals ETPs saw much more modest, but still respectable, inflows: $611 million and $204 million, respectively. Total assets in those ETPs now amount to $13.1 billion and $1.7 billion, respectively.
The only sector to see a net outflow for the year was energy, which lost $171 million. That's ironic considering that crude oil (as measured by Brent) was the top-performing commodity of the year. A plunge in natural gas prices may have hurt sentiment. Total assets in energy-related ETPs now stands at $28.4 billion.
While on the surface it looks like agriculture ETPs garnered strong investor interest in 2011, it was really only one ETP that benefited: the Market Vectors Agribusiness ETF (NYSE Arca: MOO). It alone attracted $3.7 billion in investor capital, which helped send its assets to $5.5 billion.
Other standouts were the Market Vectors Gold Miners ETF (NYSE Arca: GDX) and iShares Gold Trust (NYSE Arca: IAU), with inflows of $2.8 billion and $2.7 billion. Indeed, precious-metals-related ETPs comprised five of the top 10 best performers of the year.
On the outflows side, the Energy Select Sector SPDR Fund (NYSE Arca: XLE) saw withdrawals of $1.7 billion. Other energy underperformers were the United States Natural Gas Fund (NYSE Arca: UNG) and the United States Oil Fund (NYSE Arca: USO), with outflows of $814 million and $788 million, respectively.
Interestingly, the SPDR Gold Trust (NYSE Arca: GLD) saw an outflow of $534 million, which is in contrast to the aforementioned $2.7 billion inflow into IAU. The disparity in expense ratios between the funds — 0.4 percent for GLD vs. 0.25 percent for IAU — may explain the divergence. A $10,000 investment in GLD would incur expenses of $40, compared with $25 for IAU for basically the same product.
Finally, taking a look at the largest ETPs in the commodity space, ranked by size, the SPDR Gold Trust (NYSE Arca: GLD) still leads the pack despite the net outflow in 2011. It has $63.5 billion in assets. Three other precious metals ETPs follow: the Market Vectors Gold Miners ETF (NYSE Arca: GDX), iShares Silver Trust (NYSE Arca: SLV) and iShares Gold Trust (NYSE Arca: IAU), with total assets of $8.8 billion, $8.7 billion and $8.4 billion, respectively.
Rounding out the top five is the Energy Select Sector SPDR Fund (NYSE Arca: XLE), with $6.7 billion in assets, while the Market Vectors Agribusiness ETF (NYSE Arca: MOO) takes the sixth spot, with $5.5 billion.