2009-01-12wsj.com

In recent weeks, commodity funds have seen an influx of several billion dollars, a stark reversal from the brutal forced selling that dominated the second half of last year.

Most of the money has flowed into long-only vehicles -- funds that bet on prices to rise -- suggesting a combination of investors' revived confidence and portfolio rebalancing. This wave of fresh buying is partly behind the rally in some commodities that petered out a few days ago, and could bring more liquidity into the market.

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Among commodities, oil and gold funds are among those seeing the most interest. Last month, the United States Oil Fund, the largest oil ETF, gained $2.06 billion in net assets, and $603 million went into SPDR Gold Shares, the largest gold ETF backed with the physical metal, over the same period, according to National Stock Exchange. A silver ETF, iShares Silver Trust, had a net inflow of $37 million.


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