Benchmarking commodity trends

Benchmarking commodity trends

by Pininvest Analysis

Commodities ETFs cross-section and key drivers on pininvest.com

  • 12 constituents
  • -15.3% 1y performance
  • 25.6% volatility
Check the investment theme exit_to_app

On pininvest.com, you are finding a broad choice of investment themes, and lists of funds ranked by region, by industry and by smart β factor

It would be unwise to suggest that these – fairly numerous – listings are recommendations … the future is largely unknown and investment decisions will always remain very personal choices based on one’s profile and investment horizon

However, what pininvest seeks to provide is an informative environment

  • By comparing themes from industries favored by the market or – on the contrary – ignored by the investors, some assumptions regarding sector rotation in line with economic trends might be relevant
  • Comparing investment strategies of funds ranked within the same broad category could be a worthwhile exercise, with the understanding that today’s laggards may well be tomorrow’s winners

And of course there are many other ways to research the data and draw your own conclusions

A naïve example we comment briefly is the cross-sectional Commodities ETF, including a straightforward representation of each segment of the broad commodity market

Tracking each ETF, it is possible to identify break-out points by relating a market trend with further information, such as the geopolitical uncertainty around the Iran nuclear deal

  • As of mid-April, we observe – again and after the run-up earlier this year petered out – a clear upward trend in our token Oil index, made of 2 ETFs and . Given the strong commitment of the Trump administration to its domestic electoral base, additional pressure on oil prices should not come as a surprise
  • With even more caution, we can only observe the upward trend of our industrial steel index – an interplay of many factors represented by . It remains that the mostly favorable environment for commodities since last year may be countered in the medium term by the impact of steel and aluminum tariffs and Chinese overproduction released on the international market. We do not know...