At the request of so many investment advisors, my friends at Riskalyze share the big trends in the assets going into and coming out of advisor portfolios every week. The underlying data is aggregated from hundreds of thousands of client accounts across the $44 billion and counting that advisors manage on the Riskalyze platform*. I hope we can uncover interesting trends for you each week…
July 12 -July 19th
- Utilities (XLU)
- First Eagle Global (SGIIX)
- Doubleline Opportunistic Income (DBL)
Losers (advisor flows FROM these investments increased substantially):
- Commodity (DJP)
- Small Caps (VBR)
- Financials (XLF)
Josh here – the bloom is certainly off the rose in terms of advisor-driven portfolios with heavy allocations to commodities. The entire commodity complex has been crashing all year, with gold and oil – two of the heaviest components – leading the way lower.
In the aught’s decade, commodity exposure delivered returns above and beyond the zero percent you earned in the S&P 500. Product sponsors took this as their cue to create a slew of ETFs and ETNs that would give advisors a way to diversify simply without the need for managed future hedge funds or the actual futures contracts themselves. It was fun for awhile, until the supercycle peaked and China stopped building a city the size of Chicago every week. Since then, it’s been one bludgeoning after another – even the ag commodities have turned into a black hole of capital losses. Oh, the dollar trading at 12 year highs as literally nothing else in the world can be trusted as “safe” probably isn’t helping either.
Advisors may be re-thinking the commodity exposure they dutifully added to their client portfolios from 2008-2012. And they’re doing some selling in the meantime. Are they driving while looking into the rearview mirror? Is now the time to be recommitting to “hard assets”?
*(to state the obvious, Riskalyze does not share client sensitive data with me or use animals in testing).