Trending on ETF Database: Commodities Are Peaking Investor Interests

This past week, ETF Database saw a 132% increase in visitors to our Brazilian ETFs page. While there are several ETFs that track the Brazilian market, the premier fund is (EWZ A-). It is the largest by size and is currently up 26.38% year to date.

The Brazilian market, which has been struggling as it enters its second year of a deep recession, has recently shown some resurgence from investors. The current spark of interest seems to be related to the detention of former Brazilian President Lula, who was taken into police custody on Friday. Brazil is currently in the grips of a major political scandal involving the previous president, top members of his party, and the current president, revolving around their management of the Brazilian state-owned oil company Petrobras.

Current speculation indicates that revelations regarding potential political corruption in the Brazilian government will continue. Buying on the news, investors seem to have starting placing stock positions for a recovering Brazilian market. In fact, EWZ, along with other Brazilian ETFs, all saw marked price appreciation in just the last few days.

This past week, ETF Database saw a 106% increase in traffic to our copper ETFs page. The increased interest in price appreciation has been noted in several ETFs that track the price of copper. (JJC A), the largest copper-tracking ETF, has shown an 8.11% increase in value year to date, with much of this appreciation happening over the last few days.

All traders are aware of the massive sell-off that has continued in the commodities markets since last year. In fact, no single commodity has been spared the decrease in value. However, with the start of this year, investors seem to have grown weary of selling the commodity complex, which has begun to show a base building effort. With relation to copper, the CEO of Glencore has speculated that commodities have hit bottom. As such, investors are looking through the previous carnage to find areas of strength for the year. Copper, which has been sold off tremendously over the last year, seems to have found its bottom and is now beginning to climb steadily upwards.

Along with the rest of the commodities complex, which has been seeing renewed interest as prices hit bottom, natural gas has begun to witness a renewed interest as well. Our natural gas ETFs page has registered a 94% increase in traffic over the last week. Natural gas ETFs, including the large (UNG B-), which is currently down 28.03% year to date, have started to see small upticks in price. This rebound seems to be following a standard pattern in which the ETF will base over a small price range and then show a significant increase in value before resuming a downward slope. Only time will tell if the current basing will lead to a short-lived rebound or a more sustained rebound.

The natural gas market itself has been witnessing a bounce from an 18-year low in prices. A few days ago, natural gas hit a price of around $1.61, which is equal to the price of natural gas in 1998. Because it’s at such a low historic price, many natural gas traders have come to believe that the commodity has bottomed and will begin to rebound in the near future. However, any potential recovery may be limited due to the fact that several fundamental factors remain impediments to price appreciation. The El Niño year, which has been witnessed in most of North America over the last winter, has left a significant amount of natural gas in storage. Further, the end of March is the normal time period when utilities begin to replenish their stockpiles of natural gas; as such, it seems clear that the stockpile of natural gas could be an issue going forward.

It is rather surprising that water equities ETFs would make it into our top five for the current week. In fact, our water equities ETFs page saw an 80% increase in traffic over the last week. Water equity ETFs themselves have only registered modest increases or losses year to date with the top water ETF, (PHO A-), decreasing 1.06% year to date. The best-performing ETF in the water equities area is (FIW B+), which has increased 6.04% year to date.

There has been very little major news reported in the industry over the last week, which would partly explain such an increase in traffic to investigate these ETFs. In addition, this past weekend, the Democratic contenders for the presidency held a debate in Flint, Michigan. You may recall that this past fall the city suffered a massive problem with their water system. In fact, state agencies, private businesses, church organizations, and others have all been donating bottled water to the city’s residents as they can no longer utilize city water due to the high level of lead contamination. The debate that was held in Flint this past weekend touched on the subject and could be the rationale for why there is so much interest in water ETFs right now.

Silver ETFs, which registered in the top five last week, remained a high-interest subject on ETF Database this week as well. In fact, traffic to our silver ETFs page has increased 45% this week. (SLV B-) is still the premier ETF for tracking silver and is up 10.16% year to date. Although, silver prices have drifted lower in the last few days.

The driving force behind investment interest in silver seems to be the growing divide between silver and gold prices. The historical silver to gold ratio has continued to increase over the last few weeks as gold remains near its 2016 highs. Meanwhile, silver has lost much of its luster. Investors and traders seem to have come to the realization that either gold prices will fall or silver will have to appreciate to regain its historical ratio to gold. The increased interest in silver itself seems to point to the belief that the latter will be the final result.

This week, the belief that commodities have found a base area or are beginning a rebound bounce seems to be the common search theme. Commodity ETFs all show a resurging belief that commodities have reached at least a short-term basing area and could begin to appreciate in value over the coming weeks and perhaps months. Further, Brazil’s ETFs are trading because of the political corruption scandal in that country. Underlying the issue is Brazil’s Petrobras oil company. Finally, interest in water equities may be due to the debate in Flint, Michigan.

By analyzing how you, our valued readers, search our property each week, we hope to uncover important trends that will help you understand how the market is behaving so you can fine tune your investment strategy. At the end of the week, we’ll share these trends, giving you better insight into the relevant market events that will allow you to make more valuable decisions for your portfolio.