Commodity fund inflows rise to $3 billion in November: Lipper

NEW YORK (BestGrowthStock) – New investments in U.S. commodity products and mutual funds hit three-month highs in November, Lipper data showed on Wednesday, while regulators mulled ways to limit excessive speculation in the sector.

Total net assets of over 100 regulated U.S. products rose $3.1 billion to $133.9 billion, according to figures tracked by Lipper.

In October, estimated inflows for the products were $1.2 billion. Lipper began tracking the group in August, when inflows stood at $1.34 billion.

November’s surge in inflows jarred with the tepid performance of commodity prices that month. The 19-commodity Reuters-Jefferies CRB index (.CRB: ) finished virtually flat that month as worries over euro zone debt sparked safe-haven buying of the dollar and a selloff of risky assets, including commodities.

While many analysts argue that commodities still offer good returns in the medium term thanks to the Federal Reserve’s $600 billion bond-buying strategy, China’s inexorable growth and the expectation of tight supplies, it remains to be seen whether investors’ faith in the sector will return to the heyday before the financial crisis.

The latest Lipper data came ahead of speculative position limits in commodities due from the Commodity Futures Trading Commission on Thursday.

CFTC Chairman Gary Gensler acknowledged on Wednesday the agency would miss its January target to issue a final rule on limiting the positions any one investor can hold in commodity markets. The proposed limits have been fiercely criticized by banks and energy companies who say it could make markets less liquid and more volatile by driving away investors.

In November, the institutional class of PIMCO’s Commodity Real Return Strategy Fund (PCRIX.O: ) attracted the largest net investment, followed by the iShares Silver Trust.

In the energy sector, investors sharply boosted holdings in U.S. Oil Fund LP as oil prices in November hit two-year highs above $88 per barrel.

Excluding pure precious metal funds and other vehicles that make up more than half the total, net investment into funds that track other commodities rose to a five-month high of $2.5 billion from $1.2 billion last month, taking total assets to nearly $64 billion.

Lipper’s estimated flows are based on collected total net asset data from U.S.-based funds.

The “commodity products” classification includes only funds that invest directly in commodities via physical purchases or derivatives, not corporate securities.

It does not include fund holdings of over-the-counter indices or direct investment in futures or physical commodities, nor hedge funds. In total, financial investment into commodity markets is estimated at over $300 billion.

(Reporting by Barani Krishnan; Editing by Phil Berlowitz)

Commodity fund inflows rise to $3 billion in November: Lipper