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Buyers typically look to commodities for portfolio diversification or to hedge towards inflation. Holding commodities straight will be advanced and costly, so investing via exchange-traded funds (ETFs) is an effective way to simplify the method.
What are commodities?
Commodities are items resembling gold, oil, pure gasoline and varied agricultural merchandise. Commodities are sometimes used as inputs within the manufacturing of different merchandise in many alternative areas of the financial system.
Investing in commodities can present diversification advantages to a portfolio as a result of they typically transfer in reverse instructions to conventional property resembling shares and bonds. Many buyers additionally view commodities as a option to hedge towards inflation as a result of their costs typically rise when inflation is excessive.
Listed below are a number of the prime commodity ETFs to contemplate to your portfolio.
Prime commodity ETFs
*Knowledge as of Could 7, 2025
Invesco Optimum Yield Diversified Commodity Technique No Okay-1 ETF (PDBC)
This actively managed ETF invests in commodity-linked futures and different devices that present publicity to a various group of closely traded commodities. The fund goals to exceed the efficiency of an index composed of futures contracts on commodities throughout the power, treasured metals, industrial metals and agriculture sectors.
- 5-year annualized return: 15.8 p.c
- Expense ratio: 0.59 p.c
- Property: $4.4 billion
iShares S&P GSCI Commodity-Listed Belief (GSG)
This fund supplies publicity to a broad vary of commodities and goals to trace the efficiency of a totally collateralized funding in futures contracts on an index made up of a diversified group of commodities futures.
- 5-year annualized return: 19 p.c
- Expense ratio: 0.75 p.c
- Property: $885.2 million
SPDR Gold Shares (GLD)
This ETF offers buyers a comparatively low-cost option to put money into gold. The ETF is the most important physically-backed gold ETF on the earth with tens of billions in property underneath administration.
- 5-year annualized return: 14.7 p.c
- Expense ratio: 0.40 p.c
- Property: $102.2 billion
iShares Silver Belief (SLV)
This fund goals to typically mirror the worth efficiency of silver whereas offering handy, cost-effective entry to bodily silver.
- 5-year annualized return: 16.8 p.c
- Expense ratio: 0.50 p.c
- Property: $14.8 billion
United States Oil Fund (USO)
The US Oil Fund’s funding goal is for its each day proportion change in its shares’ NAV to mirror the each day adjustments within the spot worth of sunshine candy crude oil delivered to Cushing, Oklahoma, as measured by the Benchmark Oil Futures Contract. Over 30 successive valuation days, it goals to be inside 10 p.c of the change within the futures contract over the identical interval.
- 5-year annualized return: 25.4 p.c
- Expense ratio: 0.70 p.c
- Property: $1.1 billion
United States Pure Gasoline Fund (UNG)
The US Pure Gasoline Fund is designed to trace the actions of pure gasoline costs. The fund goals to trace the each day adjustments in proportion phrases of the worth of pure gasoline delivered on the Henry Hub, Louisiana.
- 5-year annualized return: -20.3 p.c
- Expense ratio: 1.24 p.c
- Property: $340.8 million
Invesco DB Agriculture (DBA)
This fund is designed to trace adjustments in a diversified agricultural index composed of futures contracts on a number of the hottest agricultural commodities resembling cocoa, soybeans, corn, espresso and sugar.
- 5-year annualized return: 16.6 p.c
- Expense ratio: 0.85 p.c
- Property: $821.8 million
Editorial Disclaimer: All buyers are suggested to conduct their very own impartial analysis into funding methods earlier than investing determination. As well as, buyers are suggested that previous funding product efficiency isn’t any assure of future worth appreciation.
