Raw Material Funds Yield 17% in Last 3 Months... Gold Funds 20%
Natural Gas and Silver ETNs Dominate This Month's Top Returns
Commodity Prices Expected to Remain Strong in Second Half
As raw material prices continue to rise, the returns of raw material-related funds, Exchange Traded Notes (ETNs), and Exchange Traded Funds (ETFs) are soaring. The upward trend in raw material prices is expected to continue in the second half of the year, suggesting that high returns on raw material-related investment products will be maintained.
According to financial information provider FnGuide on the 22nd, the recent three-month returns of raw material (stock) funds and raw material funds recorded 17.71% and 14.49%, respectively. The return of gold funds reached 20.62%. These three funds showed the highest returns among theme funds compiled by FnGuide. Raw material funds primarily invest directly in raw materials such as crude oil, agricultural products, and gold, while raw material (stock) funds invest in stocks of companies related to commodities such as crude oil, agricultural products, and gold.
Among ETNs, those related to natural gas and silver dominated the top returns. According to the Korea Exchange, the highest returning item this month was Meritz Bloomberg 2X Natural Gas Futures ETN(H) B, which recorded an impressive 52.03% return. QV Bloomberg 2X Natural Gas Futures ETN(H) posted 50.00%, Hana Bloomberg 2X Natural Gas Futures ETN(H) B 48.92%, Shinhan Bloomberg 2X Natural Gas Futures ETN 48.48%, and Samsung Leverage Natural Gas Futures ETN C 48.19%, all nearing 50% returns. Silver-related ETNs also recorded returns in the 40% range: Shinhan Leverage Silver Futures ETN(H) 40.23%, KB Leverage Silver Futures ETN(H) 40.15%, Samsung Leverage Silver Futures ETN(H) 40.15%, and QV Leverage Silver Futures ETN(H) 40.08%. Among the top 15 highest-returning items, 14 were ETNs related to natural gas and silver.
In ETFs, KODEX Silver Futures (H) rose 18.91% this month, and KODEX Copper Futures (H) increased by 9.89%.
The recent surge in raw material prices to record-high levels is interpreted as leading to these high returns. On the 20th (local time), the spot price of gold at the New York Mercantile Exchange (COMEX) rose to $2,440.59 per ounce, surpassing the intraday record high of $2,431.53 set on the 12th of last month. At the London Metal Exchange (LME), copper futures prices reached an all-time high of $10,848 per ton during trading.
Silver prices also hit their highest level in 11 years. On the 17th, the closing price of silver July delivery futures at the New York Commodity Exchange rose to $31.26 per ounce, the highest since January 2013. The spot price of silver also reached $31.49, marking an 11-year high.
The recently rebounding natural gas price has risen more than 70% compared to its lowest point in February this year.
The rise in raw material prices is expected to continue into the second half of the year, suggesting that the strength of raw material-related funds, ETNs, and ETFs will also persist. Lee Young-hoon, a researcher at Samsung Securities, said, "Since the beginning of the year, supply disruption issues have persisted due to OPEC+ (Organization of the Petroleum Exporting Countries (OPEC) members and non-OPEC cooperating countries) extending production cuts, natural gas producers reducing output, and ongoing copper concentrate shortages. Despite concerns about weak demand due to delayed U.S. interest rate cuts and worries about the Chinese economy, raw material prices have shown an upward trend based on supply disruptions." He added, "In the second half of the year, as supply adjustments continue, the recovery of the manufacturing sector and the start of interest rate cuts by major countries will lead to a recovery in raw material demand, potentially sustaining the overall price increase momentum."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
