Gold was the king of commodity exchange-traded funds (ETFs) in 2012. At the end of the year, assets worth $199.8 billion were under management in commodity ETFs, representing an increase of $29 billion over 2011′s assets under management (AUM). That asset increase was dominated by gold, which increased by $24 billion, bringing total assets in gold ETFs to $146.6 billion, Nick Brooks, head of research and investment strategy at ETF Securities, told Gold Investing News.
Brooks pointed out that gold ETFs witnessed a particularly strong performance in the second half (H2) of the year.
Q3 was by far the strongest quarter for these products in 2012. Gold ETFs saw global net inflows of over $7.6 billion during that period. Over $4.3 billion of that amount was invested in September, the month in which the European Central Bank introduced Outright Monetary Transactions and the Fed followed up with the announcement of its third round of quantitative easing.
With over $4.5 billion flowing into gold ETFs between October and December, Q4 was also a strong quarter.Brooks attributed the significant inflows in H2 to concerns about the fiscal cliff and the debt ceiling. On top of that were continuing concerns about sovereign debt issues in Europe, he said. North Americans tend to invest the most in gold ETFs. That held true during the last six months of 2012, with inflows from the region totaling more than $6.89 billion. Inflows from Europe totaled almost $5 billion and the rest of the world made net investments of $376 million. Psychology of gold investors This strong performance occurred despite poor gold price performance in that latter part of the year, Brooks pointed out.