Top 5 Commodity ETFs Of 2011

As we enter the home stretch of 2011, many investors are taking the time to look back on a hectic year to re-evaluate their underlying holdings and put themselves in the best position for 2012. As far as commodities are concerned, it was a pretty rough year. Though the first few months went off without a major hitch, volatility spiked as 2011 progressed, causing commodities to exhibit wild daily movements. For the most part, turning a profit was a tall order for 2011, as a number of commodity investments endured miserable returns. In fact, it is estimated that anywhere from 90%-95% of investors lose money when investing in commodities, making this year no exception [see more at How To Lose Money Investing In Commodities].

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Commodity ETN Spotlight: DPU In Focus

Exchange-traded products have become the preferred instrument for many investors looking to add core, as well as tactical, commodities exposure to their portfolios. Investors can choose from an ever-expanding “toolbox” for the right instrument that suits their needs, with some funds focusing in on a specific commodity, while others offer broad-based exposure. One of the offerings in the space is the PowerShares DB Commodity Long ETN (DPU), which has accumulated close to $6 million in assets under management since launching in April of 2008 [see also 12 High-Yielding Commodities For 2012]. DPU tracks the Deutsche Bank Liquid Commodity Index, which gives investors access to a basket of six very different commodities, resulting in a unique risk/return profile that may appeal to some more than others.

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Three Commodity Plays For 2012

It’s no secret that most commodities had a rough 2011; even top performers like gold have not been without their blips. So when it comes time to examine your portfolio for the coming year, choosing the right commodity can be a tall order. First, it is important to note that no matter which asset you choose, it will more than likely be volatile and require active monitoring as well as stop-loss protections. But while these investments may be volatile, their benefits to an overall portfolio have earned them the right to makeup anywhere from 5% to 10% of your holdings. For investors searching for the right move for 2012, we outline three enticing commodity plays to help prepare your portfolio for a clean slate after a tough year [see also 12 High-Yielding Commodities For 2012].

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Complete List Of New 2011 Commodity ETFs

This year saw a surge in popularity for commodity investing. As the years have passed, investors have seen the benefits of investing in the risky, but lucrative asset class. Commodities provide a protection against inflation as well as a low correlation to equities. One of the biggest problems within the industry was the lack of options available to investors just a few years ago. It used to be that only those with a complex futures account were able to add these securities to their portfolios. Now, there are hundreds of products to help even the smallest investor gain access to their favorite commodity investment. Below, we outline all of the commodity exchange traded products that hit the market this year [see also 12 High-Yielding Commodities For 2012].

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5 Worst Performing Commodity ETPs of 2011

Statistics show that the vast majority of commodity investors come away actually losing money, this was especially true for 2011. This year was a rough one on commodities as global instability created volatile trading, resulting in most of this asset class losing money. But of course with big losers comes a great opportunity to buy in while a fund is still cheap. Though, it may also be that you simply want to stay away from some of these bad-performing funds to protect yourself from more losses. Whatever may be the case, we outline the five worst performing commodity ETPs of 2011. Note that the list is a bit modified in that we only chose one fund from each commodity type and did not include any funds that launched this year [see also Three Things Wall Street Journal Didn’t Tell You About Commodities].

Posted in Agriculture, Cocoa, Corn, Cotton, Energy, Exclusive, Industrial Metals, Natural Gas, Wheat | Tagged , , , , | Leave a comment

Commodity ETF Spotlight: GSC In Focus

Exchange-traded products have become the preferred instrument for many investors looking to add core, as well as tactical, commodities exposure to their portfolios. The “toolbox” continues to expand as investors have multiple options available to them, with some funds focusing in on a specific commodity, while others offer broad-based exposure. One of the older products in the space is the Goldman Sachs GS Connect S&P GSCI Enhanced Commodity ETN (GSC), which has accumulated close to $70 million in assets under management since launching in mid-2007 [also see How To Lose Money Investing In Commodities]. GSC tracks a modified version of the same index as GSP and GSG, resulting in a unique risk/return profile that may attract some investors, while potentially turning away others.

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Commodity Trading Trends: Crude Oil Cheap?

The past few weeks have seen oil enjoy a meteoric rise. The fossil fuel surged from roughly $75/barrel, all the way to $102/barrel in a recent peak. But breaking the triple digit barrier didn’t last long for crude, as global instability and a lack of investor confidence moved in to create pressures for the commodity yet again. The past few trading days have been miserable for oil, as it is now fighting with prices in the low $90s. Given the recent strength exhibited by WTI, the commodity’s low prices now present themselves as an interesting play. By many accounts, crude was undervalued even when it was above $100 and the coming year may send prices even higher, making recent lows an enticing opportunity for oil [see also 12 High-Yielding Commodities For 2012].

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How To Lose Money Investing In Commodities

With real estate markets in the gutter, treasury yields at all-time lows, and equity markets plagued with instability, it’s no wonder that commodity investing has been surging in recent years. Many investors have hopped on board with the various benefits that these investments offer, including inflation protection, equity hedges, and diversification benefits to overall portfolios. Commodity are very powerful, yet often misunderstood tools. While the statistics vary, “as many as  90-95% of investors trading commodities lose money” says Matthew Bradbard of MB Wealth. That staggering figure has prompted significant backlash against commodities as of late, as investors have grown tired of these tumultuous investments [see also Dividend Special: Top Companies In Every Major Commodity Sector].

Posted in Academic Research, Commodity ETF Analysis, Commodity ETFs, Commodity Futures, commodityHQ.edu, Exclusive | 21 Comments

This Week In Commodities: December 16th Edition

Yet another up and down week for commodities as equity markets pushed and pulled at prices for investors’ favorite assets. Though there were a number of big movers, few endured weeks like both gold and oil. As of open on Monday, Gold was sitting near $1,700/oz, but after a tough week, the precious metal is now flirting with the $1,600/oz. level. Investors have grown worrisome over euro woes and feel that a stronger dollar as well as the lack of momentum overseas has left virtually no safe havens besides cash. Oil had a similarly bad week, as its price dipped all the way below $93/barrel after weeks of a strong rally. In an effort to help better educate commodity investors on today’s environment, we outline three of the best commodity stories from around the web this week [see also 25 Ways To Invest In Natural Gas].

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The 5 Best CommodityHQ Stories From 2011

For the most part, 2011 was a disappointment for the commodity space. Other than a few diamonds in the rough, and I do mean few, a wide variety of commodities took a major hit on the year, making it a tough one on investors. But some, like gold, were able to shine and remind traders why this asset class can play such a vital role in an individual portfolio. As commodity investing has grown in both popularity as well as investment options over the years, advisors and traders alike have relied on education to keep up with the fast-paced industry. At CommodityHQ, our goal is to provide investors of all kinds with valuable analysis and information on global commodity markets to help you make smarter decisions with your assets. Below, we outline five of the best stories from CommodityHQ this year to help investors make sense of a hectic 2011:

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