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Impact Investing

IPE special report May 2018

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Volatility causes flight to non-correlated assets

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Recent volatility has caused a flight to non-correlated assets, according to exchange-traded commodity (ETC) provider ETF Securities (ETFS).

ETFS said it continued to see sharp growth in ETCs, with its total assets under management growing 32% in January to over $3.3bn (€2.3bn). This demand is a result of investors wanting to diversify their investment portfolio into asset classes with low correlation to equities and bonds.

The increase in assets occurred on the back of volatile equity and bond markets, with the major equity markets falling 5-10% in January. During this period, precious metals ETCs posted returns of 8-16%.

Precious metal ETCs have now accumulated over $1.5bn of assets, with the majority having been accumulated since May 2007. In January, precious metal ETC assets increased by $330m, or 28%. ETFS Physical Platinum and ETFS Physical Gold contributed nearly $250m of these new assets

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