Gold still supreme in 1H
Gold shone in the first half of the year, while other commodities were hit hard due to the market impact of the COVID-19 pandemic, according to data.
According to FE Analytics, within the Australian core strategies universe, the commodities and energy sector had an average loss of 2.68% during 1H20.
The only non-gold fund to have a positive return was the ETFS Battery Tech and Lithium which returned 4.35%.
All gold funds provided positive returns, with BetaShares Gold Bullion ETF (AUD Hedged) returning the lowest at 13.92%.
VenEck Vectors Gold Miners was the best performer with 27.42%, followed by BetaShares Global Gold Miners (26.94%), Select Baker Steel Gold (25.49%) and Perth Mint Gold (18.42%).
In its market commentary, the Select Baker Steel Gold fund said gold equity margins were expanding, and many companies had significantly increased dividends and share buybacks.
“We believe the gold sector is poised to benefit from the momentous policy response to the COVID-19 crisis, which promises an economic environment of long-term low and negative real interest rates, unprecedented levels of stimulus spending and a rapid expansion of debt,” it said.
The worst-performing in the sector was BetaShares Crude Oil Index which lost 74.45%, followed by BetaShares Global Energy Companies (-36.36%) and BetaShares Commodities Basket (-24.27%).
The Crude Oil, Commodities Basket and the BetaShares Agriculture Currency Hedged all had their product disclosure statements updated earlier this month.
The purpose was to change the index methodology of the funds made by the index provider to help mitigate the potential impact of negative commodity futures contract prices in its indices.
“Under the changes, the index provider may elect to implement an unscheduled designated futures contract roll, being a scenario, based on market conditions, where the normal parameters of the roll, as defined in the index methodology, may be adjusted,” it said.
Top and bottom three funds in the commodities and energy sector from the start of the year to 30 June 2020
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