As a barometer of how much investment has poured into commodities to exploit the bull run in the market, the UK-based fund company ETF Securities said the volume of assets held in its exchange-listed products have risen by five times over the past year alone to break over $6 billion.

ETF Securities said assets held in precious metal and agriculture Exchange Traded Commodities rose by $2.4 billion and $1.6 billion, respectively, over the last 12 months.

ETCs are exchange-listed funds that track individual commodity indices or baskets of similar commodities. They come in a variety of forms, including ETCs that are leveraged to enhance returns, and short ETCs, that move inversely to indices.

“This demand has come as financial market volatility has caused investors to seek refuge in assets which have low correlation to equities.  Commodities are one of the few asset classes which have not been affected by the global credit turmoil, showing returns of over 35 per cent in the past 12 months and 25 per cent year-to-date compared to a 10 per cent decline in the S&P 500," ETF Securities said.

Although part of the rise in commodity prices has been fuelled by rising demand from fast-growing economies such as China as well as some supply bottlenecks, some analysts argue that an element of speculative froth has built up in the market, raising the danger of a subsequent sharp correction.