Commodity ETF flows: Investors shift from specific to wider exposure Commodity ETF flows: Investors shift from specific to wider exposure Commodity ETF flows: Investors shift from specific to wider exposure

Commodity ETF flows: Investors shift from specific to wider exposure

Ole Hansen

Head of Commodity Strategy

Summary:  In recent weeks, the commodity sector has displayed a cautious approach, after witnessing a significant rebound in June and July. This recovery was characterized by notable increases in the energy sector, particularly natural gas and diesel. However, these gains were counterbalanced by declines in both precious and industrial metals, as well as grains. Examining the latest trends in ETFs, there's a notable withdrawal from gold and, unexpectedly, from crude oil. Meanwhile, interest has concentrated on ETFs that provide a broad exposure to the commodity sector.

Today's Saxo Market Call podcast
Global Market Quick Take: Europe

The commodity sector has shown a defensive stance in recent weeks, following a robust recovery in June and July. During that period, the Bloomberg Commodity Total Return index climbed to its highest level in five months, marking a 12% increase from its lowest point in 16 months. However, since that peak, confidence has been shaken due to renewed concerns about China's prospects, given it's the world's largest consumer of commodities. Added pressures come from a strengthening dollar and increasing Treasury yields, fueled by speculations that the US Federal Reserve still needs to make more interest rate hikes to effectively manage inflation.

Strong gains in energy, led by natural gas and diesel have so far helped offset losses, not only in metals, both precious and industrials, for the reasons mentioned above but also the grains sector where improved crop conditions have raised production forecasts ahead of the coming harvest. Strongest of them all has been EU TTF gas, a contract that is not included in the BCOM index, which has surged 50% on concerns that a yet to be confirmed strike action at LNG export plants in Australia will lower the availability of LNG, thereby boosting competition for deliveries between the main buyers in Asia and Europe. 

The table below show some of the world’s largest and most actively traded commodity ETF’s, their recent performance and not least recent investor flows. There are many ETFs tracking commodities so the list is by no means exhausted and should primarily be used for information and inspiration. 

The first section are UCITS-compliant ETFs and are based on an EU directive that provides a regulatory framework for funds that are managed and based in the EU. A UCITS fund can be marketed to and traded by private investors because it adheres to common risk and fund management standards, designed to shield investors from unsuitable investments. 

The second part of the table shows mostly US listed, and therefore non-UCITS compliant ETFs. It’s among this group we find some of the world’s biggest ETFs in terms of market cap, led by the GLD and IAU, two ETFs that tracks the performance of gold. It is also worth noting that due to changed taxation rules by the US Internal Revenue Service from January 1, 2023, Saxo no longer offer access to cash trading in PTP securities as non-US persons in general will incur an added 10% withholding tax on gross proceeds from the sale, trade, or transfer of U.S. PTP securities. A change that undoubtedly increased the popularity of European issued ETFs as non-US investors have either opted to close or switch their exposure to similar ETFs outside the US PTP framework.

We chose to show the PTP registered ETFs given the signal value they can provide, but also the fact that traders understanding the added risks of holding leveraged positions can still trade these as CFD’s. 

Looking at recent flows we find, not surprisingly, the biggest reduction in holdings has been seen among ETFs that tracks the performance of bullion. Investors in these products have been net sellers for the past three months and driven by rising opportunity costs compared with the +5% investors currently receive on short-term interest rate and bond products. In addition, gold is also weighed down by the continued delay in the timing of peak rates as the FOMC stays focused on combatting inflation through higher rates. Developments that have triggered a reduction in exposure, even from asset managers who potentially maintain a long-term bullish view on gold, but where the timing of entry has become increasingly important given the mentioned funding cost of holding a position.

Somewhat surprisingly we have also seen a rather significant reduction in ETFs tracking the performance of crude oil, both Brent and WTI. Potentially driven by investors booking some profit following a strong rally to help offset losses elsewhere, or simply that investors despite the current tight market conditions courtesy of Saudi production cuts are concerned about continued macroeconomic headwinds. 

Looking at which ETFs have attracted fresh investments it is however clear that investors for varied reasons continue to seek commodity exposure, either in the belief supply tightness may underpin prices despite growth concerns or as a potential hedge against sticky inflation.The result being a month where funds have flowed from specific commodity exposures to a broader one that can be achieved through ETFs that tracks the whole commodity sector. The top three UCITS Eligible ETFs that have seen the biggest inflow this past month all tracks' the Bloomberg Commodity Index which includes a basket of 24 major commodity futures spread evenly between energy, metals and agriculture. 


The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.