The highest beta commodity equity ETFs extended their outperformance last week, with average price increases ..
# The highest beta commodity equity ETFs extended their outperformance last week, with average price increases of 6% over the week and 32% over the past month. ETFS Russell Global Shipping Large Cap Fund (SHIP), ETFS Russell Global Steel Large Cap Fund (STLL) and the ETFS Dow Jones STOXX 600 Basic Resources Fund (BRES) have all seen returns of over 25% since mid-March as investor risk appetite and demand for hard assets has continued to rise.
# The ETFS Russell Global Shipping Large Cap Fund (SHIP) has led cyclical-oriented ETFs higher, rising 8% last week and by 26% over the past four weeks. Dry bulk shipping rates, as measured by the Baltic Dry Index (BDI), have rebounded 118% since the start of 2009 as Chinese re-stocking of some basic resource inventories led to some improvement in bulk freight demand after sharp declines in 2H 2008.
Historically, SHIP has had a strong positive correlation to the BDI.
# BRES has been the best performing of ETF Securities (ETFS) equity ETFs, rising by 22% over the past three months. The Dow Jones STOXX 600 Basic Resources Index, which BRES tracks, is the best performing sector in the Dow Jones STOXX 600 index this year. BRES, STLL, and SHIP are increasingly eclipsing more defensive sectors. STLL is now the third strongest of ETFS’ equity ETFs over the past six months, catching up to the performance of ETFS Russell Global Gold Fund (AUCO) and the ETFS S-Net ITG Global Agri Business Fund (AGRI).
# The ETFS S-Net ITG Global Agri-Business Fund (AGRI) has been one of the most consistent ETF performers, with strong double digit growth year-to-date and over the past 6 months. AGRI has
outperformed the MSCI World Index by 25% over the past 6 months. Agriculture’s low correlation to the business cycle and strong long term supply-demand fundamentals are key factors supporting investor demand for AGRI.
Source: ETFWorld.co.uk – ETFSecurities ltd
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