Stocks have had a rocky start to the year thanks to concerns about rising inflation and interest rates, and their impact on the economy and corporate earnings.
Recent inflation reports have been much hotter than expected. Persistent supply chain disruptions, labor shortages and strong consumer demand continue to push prices higher.
Oil prices have soared to their highest levels in seven years as geopolitical tensions in the Middle East and Europe threaten to disrupt supply.
The shortage of natural gas, particularly in Europe and Asia, has pushed many power stations to switch from gas to oil, further exacerbating oil demand.
Gold, which is widely seen as a hedge against inflation, had underperformed last year. This year, the precious metal is in the green, as it benefitted from geopolitical and market turbulence. The SPDR Gold Shares (GLD) has recorded massive inflows lately.
Commodities have historically provided some protection against inflation. They also add diversification benefits to an equity focused portfolio.
The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC), the most popular broad based commodity ETF, is an improved version of the Invesco DB Commodity Index Tracking Fund (DBC).
PDBC is actively managed and does not issue K-1. Both ETFs invest in futures on 14 heavily traded commodities and aim to minimize contango.
The iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT) holds futures contracts on 14 commodities from six broad groups.
To learn more, please watch the short video above.
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iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT): ETF Research Reports
SPDR Gold Shares (GLD): ETF Research Reports
Invesco DB Commodity Index Tracking ETF (DBC): ETF Research Reports
Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF (PDBC): ETF Research Reports
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