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Energy leads S&P GSCI lower in August

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The S&P GSCI declined 2.37 per cent in August led by weakness in the energy sector, according to Standard & Poor’s.

The S&P GSCI Energy Index declined 3.81 per cent in August, reducing the S&P GSCI year-to-date gain to 4.50 per cent.
 
However, the S&P GSCI Enhanced Index is up 12.39 per cent year-to-date through August. The S&P GSCI Enhanced Index applies certain dynamic and seasonal rolling rules to specific commodity components of the S&P GSCI in order to lessen the impact of roll return.
 
‘The superior 2009 year-to-date performance of the S&P GSCI Enhanced Index is reflective of a period characterized by significant contango, most notably in the energy sector,’ says Michael McGlone, director of commodity indexing at Standard & Poor’s. ‘Steep contango conditions earlier this year have wreaked havoc on many energy component returns, but most of the indices designed to outperform in such conditions have done exactly that – outperformed.’
 
According to Standard & Poor’s, the S&P GSCI Crude Oil Covered Call Index posted a pro-forma year-to-date gain of 16.41 per cent at the end of August compared to the S&P GSCI Crude Oil Index year-to-date decline of 0.95 per cent.
 
The S&P GSCI Industrial Metals Index improved its 2009 status as the year’s best performing sector, increasing 7.48 per cent on the month for a year-to-date gain of 60.69 per cent.  This return comes on the back of a 108.39 per cent year-to-date gain in the S&P GSCI Copper Index.
 
Due to an August 31.08 per cent increase in the S&P GSCI Sugar Index, the S&P GSCI Agriculture Index just barely posted a gain of 0.11 per cent on the month.  However, year-to-date, the S&P GSCI Agriculture Index still shows a net loss of 4.95 per cent due to near perfect growing conditions for corn and wheat that have continued to weigh on the sector. 

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