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 more than 130 commodity ETPs to choose from, with some allowing for targeted exposure to a specific resource, while many instruments offer broad-based access. One of the newest commodity-basket ETNs on the market is the iPath Pure Beta S&P GSCI-Weighted ETN (SBV), which has accumulated a little over $5 million since its launch in mid-2011 [also see 12 High-Yielding Commodities For 2012]. SBV is similar to other broad commodity ETPs in many ways, however, its product structure, portfolio composition, and one-of-a-kind weighting methodology results in a unique risk/return profile that may attract some investors, while potentially turning away others.
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].