Since the financial crisis ended, U.S. stocks have been hot and commodities have not. The reasons are many, and the numbers don’t lie.

“By some measures, commodities are at an all-time low relative to equities,” said John Love, president and CEO of USCF, an exchange-traded product provider with a heavy focus on commodities. “If you look at the S&P GSCI Index versus the S&P 500 Index, we’re at a 50-year low on the commodity side relative to stocks.”

Love spoke during a media call on Friday hosted by Charles Schwab and devoted to commodity exchange-traded funds. The S&P GSCI Index is a broad, unleveraged basket of 24 futures contracts comprising physical commodities in five sectors spanning energy, industrial and precious metals, agriculture and livestock.

A proxy for that index—the iShares S&P GSCI Commodity-Indexed Trust, a $854.7 million ETP that tracks its namesake index and goes by the ticker GSG—spiked during the first half of 2008 and then hit the skids and has essentially been in a downward trend ever since (notwithstanding occasional small and short-lived rallies). Going back to GSG’s launch in July 2006, which includes the run-up in early 2008, that fund is down more than 68% while the S&P 500 is up more than 133% during that period.

Even though the S&P GSCI Index has gained 11.3% year to date, investors haven’t been impressed with commodities on the whole.

“We’ve seen a slowdown in buying into this asset class,” said Heather Fischer, vice president of mutual fund, ETF and 529 platforms at Charles Schwab. “What’s interesting is where the flows are going.”

She said that hefty flows into broad-basket commodity ETFs in last year’s first half were in response to strong economic growth, rising interest rates and expectations for higher inflation. In turn, she added, investors reduced precious metals holdings by about $230 million on Schwab’s platform during that time frame.

“We’ve essentially seen the reverse year-to-date 2019, with global economies slowing down, interest rates dropping and inflation expectations becoming fairly low,” Fischer said. “Clients reduced holdings in broad-basket ETFs by about $147 million [in this year’s first half], and added $198 million into precious metals due to economic uncertainties, trade policy concerns and other geopolitical issues.”

She noted these trends in commodity ETFs held true for both retail investors and financial advisors.

John Love posits that the underperformance of commodities to U.S. equities can’t last forever. “If you believe in a reversion of the mean, and when looking at things from a value standpoint, commodities look pretty attractive,” he said.

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