Commodity ETFs have provided investors the opportunity to easily invest in a single or a basket of commodities – often only accessible through physical purchase of the goods or buying futures contracts. Commodities are an asset class that is typically negatively correlated with other asset classes, such as stocks and bonds, and is considered by many investors as an inflation hedge, and sometimes – as safe-haven assets.
These characteristics were on full display since the economies reopened post-pandemic after a pent-up demand for various goods lifted prices of most commodities to multi-year or all-time highs. Since the beginning of 2021, the Bloomberg commodity index (BCOM), which reflects the performance of a broad basket of commodities futures – has gone up by +63% - further lifted by the recent war in Ukraine.
Now with the 1st quarter in the 'rear-view mirror', we review some of the top Commodity ETFs action in America and Europe, including fund flows and performance.
Top 5 most popular Commodity ETFs in America YTD (USD net inflows)
- SPDR Gold Shares (GLD): $7,146 million
- iShares Gold Trust (IAU): $1,647 million
- iShares Silver Trust (SLV): $841 million
- Invesco DB Agriculture Fund (DBA): $775 million
- Invesco DB Commodity Index Tracking Fund (DBC): $704 million
Gold and Silver ETFs have been among the most popular ETFs this year amid changing macroeconomic policies and lingering geopolitical turmoil. Gold and silver are often regarded as safe-haven metals and tend to shine when uncertainties and fear reign over the market. Investors have also injected billions into agriculture commodities ETFs as the war between two of the largest agricultural nations disrupted the supply of corn, wheat, and fertilizers.
Top 5 best performing Commodity ETFs in America YTD
- Horizons NYMEX Natural Gas ETF (HUN): +53%
- ProShares K-1 Free Crude Oil Strategy ETF (OILK): +43%
- Invesco DB Energy Fund (DBO): +40%
- Horizons NYMEX Crude Oil ETF (HUC): +36%
- Teucrium Wheat Fund (WEAT): 35%
The ongoing war has lifted energy, oil, and gas funds as sanctions on Russia – an oil & gas powerhouse – triggered fear of a major energy crunch. Brent oil, crude oil, US natural gas (Henry Hub), and European gas (TTF) futures have all registered double-digit percentage points gains this year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
