Gavekal Capital: Don't Waste Your Time On Commodity ETFs

Monday, April 6, 2015

Don't Waste Your Time On Commodity ETFs

Oil tends to get all the headline but commodities in general continue to take a beating. The Reuters CRB Continuous Commodity Index is down nearly 24% over the past year.

Our commodities diffusion index is at its lowest level since February 2009. Only one out of the 20 commodities that we track is higher over the past year.

We track 75 commodity-related ETFs or ETNs in our proprietary point and figure charting program. Not a single commodity ETF/ETN is an uptrend against the MSCI All-Country World Index. In fact, most of the ETFs/ETNs we track are in severe downtrends that have no end in sight. Below, we share with our readers several of the point and figure charts to show the overal breadth in the underperformance of commodities. Overall the message is simple right now: stay in stocks over commodities.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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