Investors put $5.2 billion into commodity  exchange-traded products (ETPs) in February, with energy among the biggest gainers due to Middle East unrest, according to data from global asset manager BlackRock (BLK.N: Quote).

 The strong net inflows contrast with net outflows of over $2 billion in January as investors dumped gold in search of higher yields. The spread of civil unrest in the Middle East in February prompted investors to funnel a net $1.04 billion into energy ETPs in the U.S. and Europe, according to BlackRock.

 "Last month we saw money coming out of gold as people took profits. This month we are seeing a demand for energy on the back of the Middle East," said Deborah Fuhr, global head of ETF Research and Implementation Strategy at BlackRock.

 Exchange-traded products include exchange-traded funds, exchange-traded commodities and exchange-traded notes. All trade on a stock exchange and their value is linked to underlying assets.

 Energy ETPs lagged other commodity sectors in 2010, with net outflows of $443.1 million, according to BlackRock.

 But oil prices rose strongly in February, with Brent crude futures LCOc1 reaching two-and-a-half-year highs on Feb. 24 at $119.79 a barrel.

 ETF Securities, an issuer of ETPs, recorded rising inflows into its energy exchange-traded commodities (ETCs) in February to almost $300 million by the end of the month.

 "From about Feb. 20 we saw the daily flows into the energy ETCs really take off," said Nicholas Brooks, head of research and investment strategy at ETF Securities.

 He said investors were not necessarily punting on higher oil prices, although he allowed that some were doing this.

 "A lot of it is large institutional investors using oil ETPs as a hedging method against further Middle East unrest affecting global risk assets," he said.

 Agriculture was the biggest draw for investors, with net new assets of $1.75 billion in the United States and Europe, BlackRock said. This compares with net outflows of $38.9 million in 2010 and $1.04 billion of net inflows in January.   

 Fuhr and Brooks attributed its popularity to bad weather that affected harvests and to investors' desire to hedge the risks associated with increased global food price inflation.

 Looking at flows on the ETF Securities platform, Brooks said agriculture had risen steadily at the beginning of the month but then levelled off and dipped towards the end.

 "This is probably profit-taking because we have seen a massive rise in prices over a short period of time in this sector. But overall holdings are still strongly net long."

 U.S. wheat futures Wc2 rose steadily in December and January but began to fall in mid-February. Investors in the wheat market have become concerned that surging oil prices will lead to a global decline in demand.

 Precious metals ETPs, which had net outflows of $4.1 billion in January, attracted $729.4 million in February in the United States and Europe, said BlackRock, as global political uncertainty increased.

 "Some people are looking for the safe haven again," said Fuhr. "We've seen some money come out of emerging markets and some people have put money back into gold."

 Brooks noted a big surge in flows at ETF Securities into precious metals ETCs in the last two weeks of February due to the rise in Middle East unrest.

 "Also we are seeing the European sovereign risk issue come back," he said.

 Gold XAU= rose steadily in February after falling in January. By the end of February it was at $1,411.30 an ounce but has since pushed higher.

 BlackRock's data covers 617 commodity ETPs, worth some $181.62 billion, and accounts for 95.3 percent of all commodity ETP assets. ETF Securities has some $27 billion under management across its platform.

 BlackRock's figures also include equity ETPs with direct commodity exposure such as gold mining firms, whereas the ETF Securities flows do not.

Global commodities exchange traded products at end-February

 Sector        No of ETPs   Assets (US$ mln)    Net new assets

Total commodities    617          181,623.4            5,233.3

Broad                 98           23,835              1,450

Agriculture          133           14,934.5            1,752.3

Energy               124           12,372.9            1,040.5

Industrial metals     96            4,869.4              240.4

Livestock             24              266.9               20.8

Precious metals      142          125,344.5              729.4

Source: BlackRock Global ETF Research and Implementation Strategy Team

Note: Global data is approximated by combining U.S. and Europe data