Ever since markets crashed in 2008, investors have been slowly increasing their risk appetites, shifting towards more lucrative and risky asset classes such as commodities. Some investments in this category have flourished, while others haven’t fared so well. Natural gas is perhaps the first cringe-worthy commodity that comes to mind as investors witnessed its unprecedented free fall over the last few years. But with NG and some of the other big losers comes a potential buy in opportunity at rock bottom prices. Whether you’re looking for a bargain or simply want to avoid these bad-performing funds, we outline 3 of the worst performing commodity ETPs over the last three years. Note that this list is a bit modified in that we only chose one fund from each commodity type [see also 12 High-Yielding Commodities For 2012].
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Of all of the commodities that have experienced a fair amount of volatility as of late, none have fared worse than natural gas. This asset has been one of the more frustrating commodities over the past few years, as it has continually hit new lows while many called it undervalued, only to watch it lob off even more of its price. Already in 2012, NG futures have sank over 27%, and a quick glance at its historical performance reveals a nasty downward trend that has persisting starting with the 2008 recession. These massive losses have burned a number of investors who have sworn off this commodity after buying in at what seemed like lows, only to watch natural gas sink below $5, $4, and finally $3. In fact, NG currently has its sights set on losing grip of the $2 mark [see also 25 Ways To Invest In Natural Gas].
Crude oil is one of the most vital commodities in the world. Whether we realize it or not, it has a presence in our everyday lives and is a fuel that our world simply cannot function without. But when it comes to crude investing, traders have long had two choice staring them in the face; Brent oil, and West Texas Intermediate (WTI) oil. The two have stumped many for quite some time, as they search for the intricacies that make these seemingly similar commodities inherently different. Beyond the attributes that set these two apart comes the question of which type of crude makes for a better investment. Recent historical data puts that question to rest, as one clear winner emerges [see also 25 Ways To Invest In Crude Oil].
Natural gas prices have taken investors and traders alike on a dismal ride down a slippery slope that few could have predicted. Many are worried that fuel prices won’t recover any time soon given the overarching fundamentals. Developments in the fracking process coupled with uncharacteristically mild weather have translated into weaker than expected demand along with towering stockpiles; two major headwinds for any commodity. Record low natural gas prices may be discouraging even the bravest of investors from speculating in the current environment, however, indirect exposure through the equity market may present itself as an appealing approach for some [see 25 Ways To Invest In Natural Gas].