Investors are putting the most money into broad-based commodity ETFs in more than two years, on bets that sticky inflation is signaling continued robust demand for raw materials.

The 20 largest exchange-traded products that invest in a basket of commodities have pulled in about $970 million so far this month, the most since March 2022, according to data compiled by Bloomberg. They collectively have assets of more than $20 billion.

Cash has been flowing back to commodities as inflation data across Western economies continue to come in at a higher-than-expected level, while economic growth figures generally improve. While that could mean interest rates will stay high, commodity bulls argue it’s a sign of strong underlying consumption that ultimately means the sector will benefit.

Traders are likely “adding some commodities into their portfolios, both to catch some of the inflation with a real asset as well as trying to ride along on some acceleration in manufacturing,” said Bjarne Schieldrop, chief commodities analyst at SEB AB.

The inflows contrast with the five largest gold ETFs, which are on track for a collective outflow of $1.8 billion this month, despite higher prices, the data show. Bullion hit a record in April even with the timeline for US rate cuts being pushed back, with the rally linked to central-bank buying, robust purchases from Asia and demand for a haven.

Most of the broad-based commodity products indexes like the Bloomberg Commodity Index or the S&P GSCI, which replicate a basket of raw materials. They don’t include ones that hold individual assets. 

This article was provided by Bloomberg News.