Commodities had an eventful year all-together, but ended the 2011 roughly unchanged. The energy-heavy MLCX TR and S&P GSCI TR indexes returned -2.6% and -1.2% respectively in 2011. The broadly diversified DJUBS TR index posted -13.3%. Meanwhile, the S&P 500 TR index returned 2.1% and the BofA Merrill Lynch US Broad Market bond index returned 7.8% in 2011.
Energy prices had a good run up in 1H11, mainly on the back of a crude oil supply shock, but finished only slightly up for the year. Base metals declined 22% on continued macro headwinds and slowing global growth.
The top three commodity investments in 2011 were gasoil with a return of 18.7%, Brent at 17.5% and RBOB gasoline at 15.1%. Negative returns were seen for natural gas at -44.4%, the worst performing commodity investment, wheat at -35.3% and copper at -21.2%.
How do we see returns evolving this year?
Brent, corn and gold total return investments should continue performing well in 2012, as the global economy crisis remains in unresolved and food shortage is on the rise.