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U.S. commodity ETPs see net $4 bln outflow through May -Lipper data
June 2, 2014 / 7:45 PM / in 3 years

U.S. commodity ETPs see net $4 bln outflow through May -Lipper data

* Negative trend continues from 2013 but at slower pace

* Better gold, platinum markets help cut investor redemption

By Barani Krishnan

NEW YORK, June 2 (Reuters) - Investors pulled $4 billion from U.S. commodity exchange-traded products in the first five months of the year, extending last year’s negative trend even as the pace of the redemptions from gold slowed, Thomson Reuters’ Lipper data showed on Monday.

In 2013, more than $33 billion left commodity exchange-traded funds, notes and mutual funds for the first annual net outflow in 12 years, according to Lipper, a division of Thomson Reuters that tracks nearly 180 U.S. exchange-traded commodity funds and products.

Preliminary data through the third week of May shows an outflow of $4.1 billion, versus $14.7 billion in the first five months of 2013.

While the bulk of last year’s exit was in gold, this year money has been mostly leaving Lipper’s group of “General Commodity Funds”.

“We could be headed for another negative year,” said Jeff Tjornehoj, head of Americas Research at Lipper.

The continued exit came even as commodity prices, especially those of energy, recovered after the polar vortex that gripped the United States in the first quarter.

The Thomson Reuters/Core Commodity CRB Index, a closely watched gauge of commodity prices, is up 12 percent since early January.

The Lipper data is consistent with research from investment banks indicating continued outflows from commodities this year, albeit at a slower pace than in 2013.

Barclays, one of the biggest crunchers of commodity numbers among investment banks, noted a total outflow of $8.5 billion through May 20 in overall commodity products, about half the amount in the corresponding period of 2013.

The reduced ETP outflow can be attributed among other things to improved gold prices and a strike in South Africa, the world’s No. 1 platinum producer, which has attracted investor interest in platinum group metals.

This year so far, less than $700 million flowed out of precious metals ETPs, down from an outflow of $18 billion in the first five months of last year.

The spot price of gold closed May’s trading at just above $1,250 an ounce, up nearly 4 percent on the year.

Lipper data issued last week showed the first net inflow in nine weeks for precious metals, with the group pulling in $368 million for the week ending May 28. (Reporting By Barani Krishnan)

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