Oil Back in Favor as Commodity Funds See First Flows in 6 Months

  • Investors added $2.3 billion to commodity funds last month
  • Oil, gold and volatility-linked alternative funds saw inflows

The beginning signs of a rebound in oil and gold were enough to lure investors back to commodity funds last month.

Exchange-traded products tracking raw materials absorbed $2.3 billion in August, the first increase in six months, according to a report from Blackrock Inc. on Thursday. Oil funds took in $1.8 billion, while those for gold collected $400 million and volatility-linked alternative products picked up $600 million.

Oil and gold rose about 4 percent in August, one of the few months with gains for markets that have seen prices steadily decline for the past two years. Crude rallied in the last few days of August as comments from OPEC and signs that the U.S. shale boom is fading faster provided optimism that a global supply glut will shrink. Gold has benefited from speculation that the Federal Reserve will hold off on raising interest rates. Prices for both have since pared some of the gains.

For the year, investors added $7.3 billion to commodity ETPs, bringing total assets to $117.5 billion. The Bloomberg Commodity Index reached a 13-year low last month on supply gluts from wheat to aluminum and oil and slowing demand in China.

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