Commodity Investments Attract $20.5 Billion in 2012, Citi Says

Investors put a net $20.5 billion into commodity exchange-traded funds and index swaps last year, led by purchases of energy and precious metals, according to Citigroup Inc.

The rise contrasted with a net withdrawal of $12.3 billion in 2011, analysts including Aakash Doshi and Edward Morse in New York said in a report dated yesterday. Crude and other fuels had a net inflow of $8.8 billion in 2012, while precious metals drew in a net $6.7 billion, led by gold, they wrote.

The Standard & Poor’s GSCI Index of 24 raw materials advanced 0.3% last year, the smallest gain since 2008, amid concern that China’s expansion was slowing. Brent crude climbed 3.5 percent, rising for a fourth year, while gold posted a 12th consecutive annual advance.

This year, in the period to Jan. 4, investors withdrew more than $400 million from commodities as the dollar strengthened, the analysts said. Minutes from the U.S. Federal Reserve showed that policy makers debated an end to the bank’s asset-purchase program in 2013, driving the Dollar Index to a six-week high.

To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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