While commodities ETFs — led by precious metals funds like the SPDR Gold Trust (GLD) and the iShares Silver Trust (SLV) — are hot, currency ETFs are even hotter.
Flows into 38 U.S.-listed currency ETFs this year stood at $2.2 billion through last week, according to a new review of fund flows by ConvergEx Group.
By comparison, the report found that some $1.99 billion flowed into 120 commodity ETFs during that same timeframe.
The big 2011 winners so far are:
- The Swiss Franc (FXF) with $541 million net inflow.
- The Canadian Dollar (FXC), which has attracted $339 million.
- The Brazilian Real (BZF), with $308 million.
In the past month, however, precious metals have roared back with more than $2 billion in positive flows. At the same time, currency funds have garnered just $60.6 million, the report added.
The Greek crisis and U.S. debt limit debate seem to have “sucked capital away from almost all currencies and into hard assets for the moment,” notes Nicholas Colas, the firm’s chief market strategist.
“A reversal of these trends –- likely when the U.S. debate is finally resolved –- will be a good sign that risk appetites are on the rise again,” he added.
One point worth noting, however. These commodities flow numbers look just at ETFs that invest in futures contracts or physically store metals for investors. Also in the field are funds that invest in miners, such as the Market Vectors Gold Miners ETF (GDX) and its small-cap focused cousin, the Junior Gold Miners ETF (GDXJ).
Through the first-half of 2011, GDX’s flows were essentially flat, according to the National Stock Exchange. The Junior Gold Miners ETF had $224 million in net inflows through the first-half of the year. Read More
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