Funds flee commodities

Goldman Sachs was the great commodity cheerleader of this cycle. It has gone quiet of late perhaps because it has a lot of angry clients. Certainly, the recent data suggest a reversal of the great commodity super cycle trade that has unwound so spectacularly in the past few months.

RBC has more:

While major commodity indexes did improve over the course of July after an early month tumble–in average m/m terms, it was pretty ugly. For notional AUM across the commodity investor products universe we analyze in this piece, July was quite a negative month for the commodity space across the board. While the supply chain/natural resource-driven inflation narrative continues, prices faltered, recession headlines continued, and over the course of the last month, underlying outflows proliferated. Notably, both the commodity-linked index space and commodity-backed ETP space had tough months on both a price and underlying basis. The question is whether this is just a couple-month stumble after a strong start to the year, or rather a more enduring move. We do not think that we should be writing off the space just yet, but this is proof that commodities are indeed not invincible.

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