The Most Liquid ETF for Every Commodity2015-06-24
The introduction of commodity ETFs brought trading to a whole new level as the average retail investor now had the opportunity to trade something like natural gas futures through a single ticker. As the years have gone on, a number of these products have grown to be some of the most widely used financial instruments for their respective commodity.
One advantage to ETFs is that liquidity is not hindered by average volume due to the creation process. There some funds that are more liquid and tradable than others [for more commodity ETF news and analysis subscribe to our free newsletter].
For those who wish to utilize these products, we outline the most actively-traded ETFs for all major commodities. Note that commodities that have just one ETF are depicted with an asterisk, leaving plenty of room for competition from hopeful issuers.
|Gold||SPDR Gold Trust (GLD)|
|Silver||Silver Trust (SLV)|
|Platinum||Physical Platinum Shares (PPLT)|
|Palladium||Physical Palladium Shares (PALL)*|
It may come as a shock that gold is not at the top of the list, but many investors forget that silver is far more volatile than its gold counterpart. Silver tends to jolt back and forth and be very trend-dependent, giving it such a high volume. Further, many advisors and experts feel it to be a better buy than gold.
|WTI Crude||3x Long Crude ETN (UWTI)|
|Brent Oil||United States Brent Oil (BNO)|
|Natural Gas||3x Long Natural Gas ETN (UGAZ)|
|Gasoline||United States Gasoline Fund LP (UGA)*|
|Heating Oil||United States Diesel Heating Oil Fund (UHN)*|
Natural Gas ETFs have been some of the worst performing ETFs in history, so it is probably best to leave them for the active traders and speculators [see also 25 Ways To Invest In Natural Gas].
The interest in corn outdoes the rest of the agricultural space despite the massive spike in soybeans back in 2012. SOYB simply hasn’t caught on with investors the same way that CORN has as it is a much more popular commodity from a consumer standpoint.
Other than copper, there is not much action going on here. The hope is that as the commodity world continues to expand its wings, these funds will be able to hit home for more investors [see also The Ten Commandments of Commodity Investing].
|Solar||Guggenheim Solar ETF (TAN)|
|Wind||ISE Global Wind Energy Index Fund (FAN)|
|Nuclear||Market Vectors Uranium+Nuclear Energy ETF (NLR)|
Last but not least, the alternative energy world has gotten some fair representation from ETFs. These funds have performed pretty poorly, but that does not mean that they cannot be used in an effective manner. All three alternative energy products offer compelling volumes to complete the trade of your choice.
Disclosure: No positions at time of writing.