Commodities Interest Stable Through Recovery
As positive economic recovery news continues to make headlines, more and more investors are moving from the dollar into riskier assets. Investors have pushed gold to above $1,060 an ounce and oil past $70 per barrel. Industry analysts attribute these increases to the weak dollar. In an effort to move away from the dollar, some investors have turned to commodities. The Federal Reserves apparent inclination to keep interest rates low along with the decisions of other governments to begin raising their rates has impacted the market by pushing commodity prices higher.
However, BHA analysts have begun to notice a reverse trend among alternative investors: investor interest in commodities has begun to recede from its peak over the summer. During July, investor interest in CTA funds hit a high, with over 37 percent of investors interviewed considering CTA/managed futures funds. That percentage held steady through August. However, there was a slight drop in September, when nearly 30 percent of investors expressed interest in CTA funds. And during the first two weeks of October, while interest in commodities remained relatively high compared with other BHA strategies, it was still off from its July peak.
For the year, commodities-related strategies have been one of the three most-popular approaches among investors profiled. Initially, this was due to their relative safety compared with other asset classes and the possibility for higher returns. However, as markets have stabilized, more assets have moved into other areas, including equities, which have experienced a bounce-back in 2009 as global markets have recovered. Taken as a whole, while investor interest in the commodities related space may have peaked during the summer months, there still remains a strong interest in these types of strategies from investors.