Commodity investor outflows of almost $10 billion in September were the most since at least the beginning of 2009 as prices slumped, Barclays Capital said.
The outflow was double the amount for the third quarter of 2008, when the worst global recession since World War II cut raw materials demand, the bank said in a report e-mailed today. Commodity assets under management fell to $393 billion last month from $447 billion in August. The drop includes the outflow plus price depreciation. Investments fell for consecutive quarters for the first time since 2008, Barclays said.
The Standard & Poor’s GSCI gauge of 24 commodities slid 12 percent last month, the most in almost three years, and about $5 trillion was wiped off the value of global stocks on speculation growth was slowing. Traders have cut wagers on higher prices by 48 percent since the end of August. Still, commodity prices are up 7.5 percent this month.
The outflow “was a reflection of jittery market sentiment and investors’ rather fickle mood,” New York-based analyst Suki Cooper wrote in the report. The “contrast between bearish sentiment, but positive macro-economic and fundamental trends in many commodities suggests that if the financial market gloom does clear, a swift rebound in most commodity prices is likely.”
Precious metals assets under management fell to $174 billion in September, when gold futures touched a record $1,923.70 an ounce, from $192 billion the previous month, according to Barclays. Industrial metals assets declined to $17.8 billion from $21.5 billion, agriculture assets slipped to $92 billion from $103 billion and energy assets were at $110 billion compared with $130 billion in August.
Money managers cut combined net-long positions across 18 U.S. commodity futures and options to 656,691 contracts in the week ended Oct. 11, from 1.272 million in the period to Aug. 30, Commodity Futures Trading Commission data show.
Raw materials rose 0.5 percent this year, heading for the weakest annual performance 2008, as Europe’s debt crisis curbed demand. While gold is up 16 percent, copper has slipped 26 percent on the London Metal Exchange. The MSCI All-Country World Index of equities declined 9.8 percent and Treasuries returned 7.8 percent, a Bank of America Corp. index shows.
“Copper could benefit most from an improvement in the financial market outlook as prices are trading a long way below fair value,” Cooper wrote. “We also continue to favor crude oil, corn and aluminum as commodities with the most constructive medium-term fundamentals, while gold looks set to benefit from the renewed concerns over inflation and currency debasement that any cure for Europe’s ills will inevitably fuel.”