* Commodities rise 2.5 pct in August vs decline in equities
* Commodities underperformed equities by 30 pct over 2 yrs
* Oil, gold and copper behind rise
By Eric Onstad
LONDON, Sept 4 (Reuters) - Commodities outperformed equities, bonds and the dollar in August with a surge in metals and oil prices, following lacklustre performance against other asset classes over the past two years.
Commodity prices have largely been weak over the past two years as a stagnant world economy has coincided with ample supplies.
The 19-commodity Thomson Reuters-CRB index has shed 21 percent since April 2011, underperforming MSCI's world equity index, which tracks shares in 45 countries, by nearly 30 percent over the past two years.
In August, however, commodities rose 2.5 percent, while world equities shed 2.3 percent.
The rise in commodities also outperformed the dollar index against a basket of currencies, which edged up 0.3 percent last month, and the Barclays Global Aggregate bond index, a measure of investment grade debt from 23 markets, which slipped 0.5 percent.
"A lot of funds have been burned with bond allocations. You're at a turning point with bonds, and equities have had a good run," said Jason Lejonvarn, strategist at Hermes Commodities. "The next phase of the economic recovery is above-trend global growth, where commodities historically outperform equities."
GOLD, OIL SURGE IN AUGUST
Commodity assets under management worldwide rose in July for the first time in five months, the latest available data, as the positive correlation between the prices of raw materials and equities weakened, Barclays said last week.
Gold, copper and oil helped drive the CRB index higher in August.
Brent crude prices rose nearly 6 percent in August, their biggest gain in a year, after unrest cut output in Libya by around 1 million barrels per day (bpd) and production fell in Iraq, Nigeria and elsewhere.
Oil prices surged again last week as investors worried the crisis in Syria could spill over into other nations in the Middle East and disrupt oil supplies, especially if the United States conducted a major military strike.
Concerns about instability in the Middle East have also supported gold prices recently, although its 5.5 percent gain in August was driven mainly by the covering of short positions by investors, analysts said.
Copper on the London Metal Exchange added 3.2 percent in August as upbeat economic data from top metals consumer China boosted hopes for stronger demand.