| LONDON, July 20
LONDON, July 20 Investors rotated into commodity
funds in the first two weeks of July, according to data from
fund flows tracker EPFR Global, as the euro zone debt crisis
intensified and wrangling over the U.S. debt ceiling continued.
The research firm said commodity funds, including physical
commodity funds, those holding futures contracts, and those
investing in the equities of commodity companies such as miners,
attracted $1.465 billion in assets in the first two weeks of
The bulk of the net inflows came in the second week of July
as investors sought the safe haven of gold and precious metals
as the euro zone crisis intensified. The flows coincided with a
warning from S&P that the U.S. credit rating might be downgraded
if an agreement on its debt ceiling was not reached.
This was the largest cumulative flow as a percentage of fund
group assets of all the sectors -- beating bonds, equities and
money market funds, EPFR said.
"The 3 percent plus portfolio gain posted by this fund group
stood out in a week when all the other 17 major equity and
sector fund groups tracked by EPFR Global lost ground," the
research group told Reuters.
EPFR Global tracks both traditional and alternative funds
domiciled globally with $15 trillion in total assets.
Asset managers have attributed the switch to investors
seeking a safe haven away from the storms in the bond and equity
Guy Monson, managing partner at Sarasin, said it was a hedge
against political breakdown in the United States and Europe
given the debt crises.
"With that background, the bears are seeing the risks for
the euro and the dollar, and saying: 'Let's go to gold'," Monson
(Editing by Christopher Johnson)