Commod assets lost record $88 bln value through Nov -Barclays

Reuters

Dec 17 (Reuters) - Commodity assets lost $88 billion in value through November, the largest decline for the first 11 months of the year on record, from a combination of investor exits and from price drops that took place mostly in gold, Barclays said on Tuesday.

In terms of withdrawals alone, investors took out a net $36.3 billion in the 11 months of the year so far, setting another record over that time period, the London-based investment bank said in a research note.

A table on commodity asset values published by Barclays show assets under management in the space falling from nearly $420 billion in 2012 to $332 billion at the end of November.

Barclays said it expected continued headwinds in commodities, with unclear price trends forecast in most markets.

"We view 2014 as likely to be another difficult year for commodity investors," Barclays said. It added that any clear and sustainable trends in prices "will likely be few and far between".

Barclays said it expects base metals to outperform oil and precious metals in early 2014, and it advocated a long, or bullish, position in nickel. It also suggested investors sell gold on rallies, and go long U.S. crude oil while shorting, or placing bearish bets against, London's Brent crude.

This year's broad drop in asset values was primarily caused by the flow of investments out of precious metals led by gold, said Barclays.

The spot price of gold is down 27 percent year-to-date, falling 5 percent in November alone. Barclays estimated total commodity outflows for last month at $1.9 billion.

For commodity-backed exchange-traded products (ETPs), the downtrend seen in September persisted through to November and they tumbled below $130 billion in assets to reach their lowest level since July 2010, Barlcays said.

Despite the gloom, Barclays said there was some cheer in the commodity statistics, with estimated combined flows into commodity index swaps, index-linked notes and exchange-traded products totalling almost $2.5 billion in the year to November.

"There are signs that some sectors are starting to generate investor interest again," Barclay's said.

Barclays's breakdown of commodity assets under management, in billions of dollars: Nov-13 Oct-13 Q3-13 Q2-13 2012 2011 Total 332 340 345 331 418 386 Indices 124 125 126 121 133 137 Exchange-traded products 124 130 135 127 204 174 Medium-term notes 84.9 84.5 84.1 82.1 81.1 75.3 Nov-13 Oct-13 Q3-13 Q2-13 2012 2011 Total 332 340 345 331 418 386 Precious metals 119 125 130 121 197 167 Base metals 24 25 24 23 25 21 Agriculture 59 60 60 60 64 63 Energy 130 130 132 126 132 135

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