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Natural gas, U.S. drought fuel commodity fund gains

What are we looking for?

How commodity funds have fared over the past year.

The screen

We ranked the funds by the best returns for the year ended Jan. 31. U.S. dollar, segregated and duplicate versions of funds were excluded.

What did we find?

Agricultural and energy funds led the way, while precious metals investments lost a lot of shine.

The rising price of corn, soybean and wheat, which was triggered by last summer's drought in the U.S. Midwest, helped BMO Agriculture Commodities exchange-traded fund gain nearly 6 per cent. (This ETF also tracks futures contracts of commodities like cocoa, coffee, sugar and cotton.)

"The dry and scorching weather between late June and August of last year severely limited crop production and supply," said Alfred Lee, a portfolio manager with BMO ETFs at BMO Global Asset Management. "That area in the United States, known as the Corn Belt, also produces wheat and soybeans."

BMO Energy Commodities ETF, which tracks various energy futures contracts, rose nearly 3 per cent.

"The big story in energy was natural gas prices, which gained 23.1 per cent over the period," he said. "Part of the reason was due to speculation that President Obama would change environmental regulations that would curb the use of coal. ... Continued tensions in the Middle East also drove Brent oil prices higher."

The iShares Broad Commodity ETF was basically flat with a return of less than 1 per cent. It switched benchmarks on Nov. 30 to track a Morningstar commodity index that includes everything from oil to corn and cattle futures. It formerly tracked an index of 12 different commodities that is now the focus of the Horizons Auspice Broad Commodity ETF, which listed in Canada last week.

Precious metals funds are in the red as gold and silver bullion prices have tumbled. Funds invested in bullion and mining stocks have fared worse. Dynamic Strategic Gold Class shed nearly 24 per cent, while CI Signature Gold Corporate Class lost more than 12 per cent. Concerns over China's slowing economy weighed on BMO Base Metals Commodities ETF, which is off nearly 7 per cent.



% rtn.
% return (Jan. 31)YTD% returnAssets
FundTicker1-yr3-yr(Feb. 22)20122011201020092008MER($-mil)
BMO Agriculture Commodities Idx ETFZCA-T5.9%-2.8%2.4%0.766.5
BMO Energy Commodities Idx ETFZCE-T2.9%3.7%-0.4%0.763.3
iShares Broad Commod Idx C$-Hgd Com ETFCBR-T0.9%1.8%-0.9%-0.4%0.8775.3
iShares Gold Bullion (CAD-Hedged) ETFCGL-T-2.0%15.9%-5.4%8.2%10.9%26.6%0.50587.9
iShares Gold Bullion (Non-Hedged) ETFCGL.C-T-5.4%-2.7%2.8%0.5044.9
Sprott Gold Bullion Fund-A-5.8%11.5%-3.1%3.3%11.2%21.4%1.10278.8
BMO Precious Met Commodities Index ETFZCP-T-6.0%-6.4%5.3%0.765.3
BMG Bullion Fund-A-6.3%9.9%-0.2%1.3%-4.6%31.1%19.3%-4.1%3.05306.7
BMO Base Metals Commodities Index ETFZCB-T-6.8%-1.6%-0.7%0.752.3
Mackenzie Univ Gold Bullion Cl A-7.2%11.2%-3.8%1.6%8.4%2.59115.9
Sprott Silver Bullion Fund-A-7.3%-2.9%4.4%1.71173.0
BMG Gold Bullion Fund-A-7.8%8.8%-3.0%0.1%10.7%15.0%3.06133.9
CI Signature Gold Corporate Class-12.4%-7.0%-1.7%-2.5%2.4659.5
Dynamic Strategic Gold Class-23.7%3.5%-15.3%-9.1%-13.0%41.3%2.43266.0
S&P/TSX Total Return5.0%7.5%2.5%7.2%-8.7%17.6%35.1%-33.0%
S&P 500 Composite Total Return Idx($Cdn)16.1%11.7%9.6%13.5%4.4%9.4%8.1%-21.9%
Note: Horizons COMEX Copper ETF (HUK) was closed on Jan. 18; Source: Lipper, Bloomberg

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