After worst year ever, commodities may lag recovery

SINGAPORE (Reuters) – Commodities, until six months ago the darling of investors and an out-performing asset class, sealed their worst year on record with accelerating losses in the fourth quarter of the year, data showed on Thursday.

Industrial metals, crude oil and even grains took it on the chin as the world fell into recession and investors sold anything liquid or risky to cover deepening losses elsewhere or sock away cash for a brighter day, wiping out six years of nearly unbroken gains in the space of months.

The five commodity indexes used most heavily by investors to gain exposure to raw material prices — tracking energy, metals and agriculture markets — showed an average 40.5 percent dive in the fourth quarter, taking the full-year fall to 42.35 percent.

Indices collapsed by more than two-thirds from their record highs in early July, suffering a 25 percent average loss in the third quarter — the first negative performance for commodities after four straight positive quarters that had handed investors some of their best returns in 35 years.

Reuters