Gold and oil ETPs lead investor demand at ETF Securities

Aug 11th, 2016 | By | Category: Commodities

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Investors increased their exposure into long oil and gold exchange-traded products by $113.0m and $74.4m, respectively at the beginning of August (ended 5 August 2016), according to the latest weekly flows analysis of ETPs offered by London-based ETF Securities.

Gold and oil ETPs lead investor demand at ETF Securities

Flows into long oil ETPs at ETF Securities were at a 17 month high last week at $113.0m while investors also increased their long gold exposure by $74.4m.

Demand for the firm’s long oil ETPs is the highest recorded since March 2015. Last week also saw outflows of $4m from short oil ETPs as the price of WTI fell below the $40 per barrel for the first time since April. The price has recovered since then and, as of the time of writing on 10 August 2016, was trading at $42.50 per barrel. Brent Crude reached a low of $41.80 on 2 August 2016 but has since recovered to trade at $44.89.

ETF Securities believes the current fall in oil prices may be temporary as a recent uptick in US production starts to be pared back. The firm writes: “The unusual increase of oil inventories in the US for the second consecutive week is weighing on the price of both oil benchmarks despite gasoline inventories showing a large drawn-down for the first time this summer. Petroleum inventories in the US tend to decline during the summer driving season. We expect WTI crude inventories to follow gasoline inventories and start to decrease in coming weeks.”

ETF Securities reports that the firm’s range of crude oil ETPs has experienced net inflows over the past month of $187.3m, comprised of $202m into long oil ETPs and $14.7m outflows from short oil ETPs. The long oil funds lost 6.9% in value over that period but are up 3.8% year-to-date (YTD).

The firm offers the ETFS Brent Crude (LSE: BRNT) and ETFS WTI Crude Oil (LSE: CRUD), tracking indices designed to reflect a continuously rolling investment in Brent Crude and WTI oil futures contracts respectively. ETFS Brent Crude has current assets under management (AUM) of $96m and ETFS WTI Crude Oil has AUM of $760m. Both have a total expense ratio (TER) of 0.49%.

Turning to gold, the yellow metal continued to see strong inflows during the week of $74.4m as it traded near a two-year high. At the time of writing, gold had appreciated by 28.5% since the start of the year and is trading at $1362.10 per ounce. ETF Securities reports net inflows of $518.1m over the past month into its gold ETPs and $3.5bn YTD, the vast majority of which has been into long exposures.

Commenting on gold’s trading range over the past week, ETF Securities writes: “While initially rising due to monetary expansion in the UK and fiscal expansion in Japan, gold slid following a bullish US non-farm payroll release. The recent decline could generate a fresh-round of buying as investors seek to shore up hedges in their portfolio.”

ETF Securities offers the ETFS Physical Gold (LSE: PHAU) which currently has $6.4bn in AUM. PHAU is backed by physical allocated gold held by HSBC Bank. It is designed to offer security holders a simple, cost-efficient and secure way to access the gold market by providing a return equivalent to the movements in the gold spot price less the TER of 0.39%.

Investors wishing to gain magnified exposure to crude oil prices, whether long or short, may consider a range of ETPs listed on the London Stock Exchange from providers ETF Securities or Boost ETP. These include the:

ETFS 1x Daily Short Brent Crude – USD (SBRT) TER – 0.98%
ETFS 2x Daily Long Brent Crude – USD (LBRT) TER – 0.98%
ETFS 1x Daily Short WTI Crude Oil – USD (SOIL) TER – 0.98%
ETFS 2x Daily Long WTI Crude Oil – USD (LOIL) TER – 0.98%
ETFS 3x Daily Long WTI Crude Oil – USD (3CRL) TER – 0.98%
ETFS 3x Daily Short WTI Crude Oil – USD (3CRS) TER – 0.98%

Boost WTI Oil 1x Short Daily ETP – USD (OILZ) TER – 0.49%
Boost WTI Oil 1x Short Daily ETP – GBP (OIZL) TER – 0.49%
Boost WTI Oil 2x Short Daily ETP – USD (2OIS) TER – 0.65%
Boost WTI Oil 2x Short Daily ETP – GBP (2OSI) TER – 0.65%
Boost WTI Oil 2x Leverage Daily ETP – USD (2OIL) TER – 0.65%
Boost WTI Oil 2x Leverage Daily ETP – GBP (2OLI) TER – 0.65%
Boost WTI Oil 3x Short Daily ETP – USD (3OIS) TER – 0.99%
Boost WTI Oil 3x Short Daily ETP – GBP (3SOI) TER – 0.99%
Boost WTI Oil 3x Leverage ETP – USD (3OIL) TER – 0.99%
Boost WTI Oil 3x Leverage ETP – GBP (3LOI) TER – 0.99%
Boost Brent Oil 3x Short Daily ETP – USD (3BRS) TER – 0.99%
Boost Brent Oil 3x Short Daily ETP – GBP (3BSR) TER – 0.99%
Boost Brent Oil 3x Leverage Daily ETP – USD (3BRL) TER – 0.99%
Boost Brent Oil 3x Leverage Daily ETP – GBP (3BLR) TER – 0.99%

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