Now trending: Commodities

May 22, 2016 02:30 PM

Commodities have been on a steady downward trend for the last 18 months. However, in March, many have rallied along with global equity markets. A broad basket of commodity ETFs we track is up 8% in the four-week period ending March 21 (vs. 8.7% for the S&P 500 and 4.7% for the EuroStoxx 600 Index).

Trendrating’s Smart Momentum analytics detects changes in momentum, helping investors limit downside capture and protect profits in down markets while presenting positive momentum opportunities that provide actionable insight to the discerning investor. 

“Commodities gain momentum” shows the current distribution of momentum ratings in a basket of commodity-focused ETFs. About 46% of commodity ETFs are exhibiting negative momentum, while 54% are in an upward trend (“A-” and “B-” rated). “A”-rated securities are out-performing “D”-rated securities by an average of about 10% since rated. However, that does not tell the whole story as 85% of issued ratings have been for ETFs moving into positive momentum (“A” and “B” ratings).

How are Trendrating’s momentum ratings performing? “Commodity grades,”  shows the distribution and performance of ratings within the different commodity sectors. Agriculture, gold and precious metal ETFs had the most positive momentum. Energy ETFs had negative momentum. After relatively poor performance during the last 18 months, commodities have staged a comeback at the end of Q1. Agriculture, gold, precious metals and silver appear to be leading this charge. 

“A closer look” shows how each of the individual commodities is performing since being rated.

About the Author

Rocco Pellegrinelli, Trendrating founder & CEO, began his career as a portfolio manager and investment banker and has since been a proven fintech entrepreneur for the past 20 years. He created Brainpower in 1996 and established it as one of the top portfolio management systems globally. After going public on the Frankfurt Stock Exchange in 2000, Brainpower was acquired by Bloomberg in 2006. @trendrating