Thu, Jan 29, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque Futures Intelligence

Index Tracker: Commodity Index Investing Data: Dramatic Growth in Gold and Agriculturals.

Friday, April 29, 2011

Commodity Index Growth
By Chidem Kurdas

There has been dramatic growth in index-related commodity investments over the past two years. In particular, investments in gold and certain agricultural commodities like corn have expanded substantially, as the table below shows.

The Commodity Futures Trading Commission collects information on index investing in commodity markets. For this purpose, the investors include index funds, swap dealers, pension funds, hedge funds and mutual funds. Exchange-traded funds and exchange traded notes are  part of the index activity.

These participants use both direct investments in futures markets and indirect investments through over-the-counter swap agreements with financial firms. The CFTC obtains information about both activities. For OTC agreements, the Commission uses "special call" requests for details of firms' market positions in physical commodity futures.

The data below is the notional value of futures contracts for all US markets with more than $0.5 billion of reported net notional value of index investment at the end of any one month.

Index Investment Growth

 Notional Value of Futures Contracts, Net billions of $

  Feb. 28, '11 Dec.31, '10 Dec.31. '09 Dec. 31, ‘08
Total, US and Non-US  232.7 211.1 159.9 82.2
Selected US Futures: 47.3 41.7  36.4 20.1
WT1 Crude Oil        
Gold  16.7 14.9 8.4 6.1
Natural Gas 16.5 14.6 14.7 7.1
Corn 15.6 13.8 6.9 5.0

SOURCE: Commodity Futures Trading Commission, various reports

Gold  is an outstanding example. Index-related gold futures activity - as defined above - fell from 2007 to 2008, reflecting the unusual circumstances at the time. By the end of 2009, conditions were more normal. From then to the time of the latest data release  at the end of February 2011, the notional value of gold contracts approximately doubled.

This year gold futures have been the largest sector  after crude oil, whereas in the past other commodities like natural gas drew far more activity than gold.

For a discussion of possible adverse effects from the inflow of capital into futures markets, see this issue's Inside Talk with Mack Frankfurter.



 
This article was published in Opalesque Futures Intelligence.
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Opalesque Futures Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  2. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  3. Opalesque Exclusive: Ex-Citi trader launches 'sleep-at-night’ long/short equity fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: After working at Citi's proprietary trading desk, managing a large portfolio between 2008 and 2011, Joel S. Salomon founded SalauMor Management in New York

  4. …And Finally - Prison restaurant is the best in Cardiff[more]

    From Orange.co.uk: A restaurant at a prison staffed entirely by inmates has been ranked as the best in Cardiff by diners. The Clink Restaurant at HMP Cardiff - which is open to the public - has been ranked number one on TripAdvisor out of 946 eateries in the Welsh capital. Diners who pos

  5. Update: Prosecutors seek 12 years for hedge fund manager Francisco Illarramendi[more]

    Komfie Manalo, Opalesque Asia: Federal prosecutors have asked the court to sentence convicted hedge fund manager Francisco Illarramendi to 12 years imprisonment for running an elaborate Ponzi scheme that bilked investors hundreds of millions in dollars, including a Venezuelan pension fund, report