Cinthia Murphy, Managing Editor, ETF.com
It’s that time of year when we look back at what’s worked—and what hasn’t—in investing. With two weeks to go in the year, we can say that after a tough 2018, commodity ETFs as an asset class are on pace to deliver this year their strongest gains since 2016.
Some ETFs in this segment have handily outpaced the often-record-breaking U.S. equity market this year. Consider that, at the top, the Aberdeen Standard Physical Palladium Shares ETF (PALL) is shelling out 51.6% in gains year to date, as palladium prices trade at a 33% premium to gold.
PALL is just one of the commodity ETFs standing out. Here’s a look at the year’s best-performing commodity ETFs, excluding leveraged/inverse strategies:
| Ticker | Fund | YTD Returns (%) |
|---|---|---|
| PALL | Aberdeen Standard Physical Palladium Shares ETF | 51.62% |
| UGA | United States Gasoline Fund LP | 36.19% |
| JJN | iPath Series B Bloomberg Nickel Subindex Total Return ETN | 30.88% |
| BNO | United States Brent Oil Fund LP | 29.94% |
| USO | United States Oil Fund LP | 27.33% |
| USOI | Credit Suisse X-Links Crude Oil Shares Covered Call ETN | 27.09% |
| OIL | iPath Series B S&P GSCI Crude Oil ETN | 27.06% |
| OILX | ETRACS S&P GSCI Crude Oil Total Return ETN | 26.99% |
| OLEM | iPath Pure Beta Crude Oil ETN | 26.00% |
| OILK | ProShares K-1 Free Crude Oil Strategy ETF | 25.33% |
| USL | United States 12 Month Oil Fund LP | 23.50% |
| DBO | Invesco DB Oil Fund | 22.79% |
| AOIL | Aberdeen Standard Bloomberg WTI Crude Oil Strategy K-1 Free ETF | 20.55% |
| GSC | GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN | 19.51% |
| PLTM | GraniteShares Platinum Trust | 17.98% |
| PPLT | Aberdeen Standard Physical Platinum Shares ETF | 17.81% |
| RJN | Elements Rogers International Commodity Index-Energy TR ETN | 17.48% |
| PGM | iPath Series B Bloomberg Platinum Subindex Total Return ETN | 17.44% |
| GLTR | Aberdeen Standard Physical Precious Metals Basket Shares ETF | 17.07% |
| JO | iPath Series B Bloomberg Coffee Subindex Total Return ETN | 16.56% |
From precious metals, to oil, to coffee, the list of best performers shows that, broadly, commodities have had a strong year. That doesn’t mean we’re in the throes of a commodity bull market. Quite the contrary, commodities remain depressed relative to where they were a decade ago, ETF.com’s Sumit Roy reports.Data measures total returns for the year-to-date period through Dec. 11.
“One widely followed marker of commodity returns, the S&P GSCI Spot Index, is up 12.3% year to date, clawing back some of 2018’s 15.4% loss,” he said. “To be sure, commodities aren’t suddenly roaring back to life. Based on the spot index, the asset class is still down 7.5% over the past five years; 14% over the past 10 years; and a whopping 53% since its peak in July 2008.”
“Meanwhile, the S&P GSCI Total Return Index, which measures the actual experience of holding commodity futures and rolling them over one month to the next, has delivered even worse returns: a loss of 29% over the past five years; a loss of 41% over the past 10 years; and a 77% loss since the 2008 peak,” he added.
While some commodity ETFs have delivered strong double-digit returns, many of them have been left out of the rally. A look at the flip side of the coin shows that leading the worst-performing commodity ETFs of the year is a trio of natural gas products—the iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ), the United States Natural Gas Fund LP (UNG) and the United States 12 Month Natural Gas Fund LP (UNL). These funds are down anywhere from 19% to 37% this year.
Here’s a look at the bottom performers, excluding leveraged/inverse ETFs:
| Ticker | Fund | YTD Returns (%) |
|---|---|---|
| GAZ | iPath Series B Bloomberg Natural Gas Subindex Total Return ETN | -37.02% |
| UNG | United States Natural Gas Fund LP | -30.31% |
| UNL | United States 12 Month Natural Gas Fund LP | -19.07% |
| CORN | Teucrium Corn Fund | -11.28% |
| BAL | iPath Series B Bloomberg Cotton Subindex Total Return ETN | -11.05% |
| JJT | iPath Series B Bloomberg Tin Subindex Total Return ETN | -9.28% |
| GRU | Elements MLCX Grains Index-Total Return ETN | -8.59% |
| COW | iPath Series B Bloomberg Livestock Subindex Total Return ETN | -8.16% |
| WEAT | Teucrium Wheat Fund | -8.09% |
| TAGS | Teucrium Agricultural Fund | -7.92% |
| FUE | Elements MLCX Biofuels Index-Total Return ETN | -7.89% |
| JJG | iPath Series B Bloomberg Grains Subindex Total Return ETN | -7.14% |
| JJU | iPath Series B Bloomberg Aluminum Subindex Total Return ETN | -6.78% |
| SOYB | Teucrium Soybean Fund | -6.43% |
| RJA | Elements Rogers International Commodity Index-Agriculture TR ETN | -4.64% |
| FUD | ETRACS UBS Bloomberg CMCI Food Total Return ETN | -4.60% |
| SDCI | USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund | -4.58% |
| USCI | United States Commodity Index Fund | -4.45% |
| UAG | ETRACS UBS Bloomberg CMCI Agriculture Total Return ETN | -3.71% |
| DBA | Invesco DB Agriculture Fund | -3.01% |
Data measures total returns for the year-to-date period through Dec. 11.
It remains to be seen what 2020 will bring for this asset class.
More on ETF.com:
Invesco Closing 42 ETFs, $1B In Assets
Nominations Open For 2019 ETF.com Awards
ETF Inflows Stay Ahead Of Last Year's Pace
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.