US commodity inflows fall in Oct; gold stays strong-Lipper

Wed Nov 14, 2012 4:12pm EST

* Commodity inflows drop on fears of slowing growth
    * Gold/precious metals inflows alone up for a third month
    * SPRD ETF takes in more than half of precious metals' money

    By Barani Krishnan
    Nov 14 (Reuters) - The monthly money flow into U.S.
commodity products and funds fell by a fifth in October as
investors veered off risk on fears over slowing global growth,
but interest in gold funds remained strong, data from funds
tracker Lipper showed on Wednesday.
    Gold and other precious metals dominated investments in
commodities for a third straight month, due to their perceived
safe haven status, October figures for Lipper showed.
    A net inflow of nearly $1.7 billion was noted across some
230 U.S.-regulated commodity products and funds last month,
versus a September figure of nearly $2.2 billion, according to
Lipper, a Thomson Reuters company.
    The decline came amid fears that growth in No. 2 economy
China was slowing, and Europe's debt crisis was escalating as
Greece and Spain struggled to make citizens agree to stricter
austerity measures that would allow them to seek for more euro
zone aid.
    Lipper data showed investors pulling money in October from
general commodity funds such as those run by PIMCO, the giant
U.S. bond manager, and adding to their portfolios positions in
precious metals.
    Analysts said industrial commodities such as oil and copper
were deemed riskier in a slowing economy to shiny metals like
gold, silver and platinum, which were seen as a better store of
value and more easily saleable for cash.
    In August, investors seeking to hedge against currency
weakening from a forthcoming U.S. economic stimulus piled into
gold, taking inflows in commodities to a six-month high, Lipper
data showed. 
    September marked another strong month for precious metals,
with the sector accounting for three-quarters of inflows.
    Last month, the net money that went into gold and other
precious metals funds amounted to $1.4 billion, or 85 percent of
net inflows, according to Lipper.
    The October rush into gold came as bullion prices hit
11-month highs above $1,795 an ounce early in the month, before
falling below $1,700 on profit-taking as November approached.
    SPDR Gold Shares, the world's largest exchange-traded
fund (ETF) for gold -- took nearly $900 million of the $1.4
billion that went into precious metals last month. In September,
SPDR took in $1.74 billion, or about three-quarters of all net
inflows. 
    The ETF with the second largest inflow last month was
iShares Gold Trust. It attracted nearly $500 million,
versus September's $610 million.
    The biggest outflow for October - about $433 million - was
from the Pimco Commodities Real Return Strategy Fund for
institutional investors.     
    Total net asset value for all the U.S. commodity products
and funds tracked by Lipper fell to about $172 billion from
September's level of around $178 billion. 
   Lipper's data typically does not include fund holdings of
over-the-counter indexes, or direct investment in futures, or
physical commodities, or hedge funds.  
   Its historical data also includes only funds currently in
operation. The products and funds it tracks invest in physical
commodities or derivatives and not in corporate securities.
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