The best commodity ETFs

How do I invest in a broad commodities basket?

Investing in commodities is considered risky. However, from a diversification perspective it can be interesting to invest in commodities. In particular, the historically negative correlation of commodities to stocks can improve portfolio diversification. A commodities investment is generally realised through an investment in forward or futures contracts. Commodity indices usually track a basket of commodities.

There are several indices available to invest with ETFs in a broad basket of commodities. There are also subindices on single or selected commodity segments, which are usually derived from broad basket indices. This Investment Guide will help you navigate among the peculiarities of the most important commodity indices, which vary substantially in their methodologies. It will allow you to find the most suitable ETFs for you by ranking them according to your preferences.

0.15% p.a. - 0.60% p.a.
annual total expense ratio (TER) of commodity ETFs
on commodities, which are tracked by ETFs
on commodities
The best indices for commodity ETFs

The best commodity ETF by 1-year fund return as of 31/07/20

All commodity ETFs ranked by fund return

 

The largest commodity ETF by fund size in EUR

All commodity ETFs ranked by fund size

 

The cheapest commodity ETF by total expense ratio

All commodity ETFs ranked by total expense ratio

 
 

Commodity indices compared

Diversification of the most important commodity indices

 

Source: justETF Research; Strategic weights of the single commodity segments

 

Methodologies of the most important commodity indices

Bloomberg Commodity Rogers International Commodity (RICI) Refinitiv/ CoreCommodity CRB UBS Bloomberg CMCI
Number of ETFs 3 ETFs 1 ETF 1 ETF 1 ETF
Number of commodities 23 38 19 27
Index review annually annually
(index is rebalanced monthly)
annually
(index is rebalanced monthly)
annually
(index is rebalanced monthly)
Selection criteria Economic significance (production), diversification, continuity and liquidity Global consumption and liquidity (reviewed by a committee) Liquidity, economic importance, correlation and contribution to strategic asset allocation (reviewed by a committee) Fundamental factors and liquidity
Index weighting 1/3 production
2/3 liquidity
Global consumption and liquidity (reviewed by a committee) Grouped by liquidity (4 groups). Petroleum products capped at 33%, other 3 groups equal weighted Fundamental factors and liquidity
Cap on single commodity 15% - Group-specific 35% largest commodity
20% all others
Cap on commodities segment 33% - - -

Source: justETF Research; As of 31/05/2020

 

Performance of the commodity indices in comparison

Performance of the commodity indices in comparison
 

Bloomberg Commodity Index

The Bloomberg Commodity Index (previously: Dow Jones UBS Commodity Index) is based on the economic significance of the commodities. Besides diversification, continuity and market liquidity are considered when selecting and weighting the index components. Currently, the Bloomberg Commodity index tracks 23 commodities from the energy, precious metals, industrial metals, livestock and agriculture segments.

 

Methodology of the Bloomberg Commodity Factsheet Methodology

  • Broad commodities basket of 23 components
  • Commodities are selected by economic significance (production), diversification, continuity and market liquidity
  • Annual index review and rebalancing
  • Monthly roll period
  • Single commodity is capped at 15%
  • Commodities segment is capped at 33%
  • The index was introduced in 1998

Further subindex

Bloomberg Commodity 3 Month Forward

 

Rogers International Commodity (RICI) Index

The Rogers International Commodity (RICI) Index is a broad commodities index that tracks 38 commodities. The index composition is dependent on the global consumption and liquidity of each commodity and is reviewed by the RICI committee.

 

Methodology of the Rogers International Commodity (RICI) Factsheet Methodology

  • Broad commodities basket of 38 components
  • Index is rebalanced on a monthly basis
  • Index selection and weighting is reviewed on an annual basis by the RICI committee
  • Monthly roll period
  • The index was introduced in 1998
 

Refinitiv/CoreCommodity CRB Index

The Refinitiv/CoreCommodity CRB Index (previously: Thomson Reuters/CoreCommodity CRB Index) is a broad commodities index that tracks 19 commodities. Dependent on their liquidity, the commodities are segmented into four groups. The first group contains petroleum products and is capped at 33%. The second group contains seven highly liquid commodities (which are equal weighted at 6%) and is capped at 42%. The third group contains four liquid commodities (equal weighted at 5%) capped at 20%. Finally, the last group contains five commodities (equal weighted at 1%) capped at 5%.

 

Methodology of the Refinitiv/CoreCommodity CRB Factsheet Methodology

  • Commodities basket of 19 components
  • Commodities are selected by liquidity, global economic significance, correlations of commodity sectors and their contribution to strategic asset allocation
  • Annual index review
  • Index is rebalanced on a monthly basis
  • Monthly roll period
  • The index was introduced in 1994

Further subindices

Refinitiv/CoreCommodity CRB Non-Energy
Refinitiv/CoreCommodity CRB Non-Agriculture and Livestock

 

UBS Bloomberg CMCI Index

The UBS Bloomberg CMCI Index tracks 27 commodities representing five broad sectors including energy, precious metals, base metals, agriculture and livestock. The index diversifies its futures across the maturity curve and thus offers constant maturities. Therewith, the index tries to minimise the risk of a negative roll yield.

 

Methodology of the UBS Bloomberg CMCI Factsheet Methodology

  • Broad commodities basket of 27 components
  • Commodities are selected according to economic indicators like CPI, PPI, and GDP. Secondary factor is their market liquidity
  • Largest commodity is capped at 35%, all other commodities are capped at 20%
  • Constant maturity to reduce the negative roll yield
  • Annual index review
  • Index is rebalanced on a monthly basis
  • Daily roll period
  • The index was introduced in 2007

Further subindex

UBS Bloomberg CMCI Ex Agriculture Ex Livestock Capped

 
 

Commodity ETFs in comparison

The most important factors at a glance

When choosing a commodity ETF one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all commodity ETFs with details on size, cost, age, income, domicile and replication method ranked by fund size.

Compare all commodity ETFs in detail
Compare all commodity ETFs in a chart

Provider
ISIN
  Fund size
in m EUR
TER
in %
Use of profits Fund domicile Replication method
iShares Diversified Commodity Swap UCITS ETFIE00BDFL4P12 1,303 0.19% p.a. Accumulating Ireland Unfunded swap
L&G Longer Dated All Commodities UCITS ETFIE00B4WPHX27 435 0.30% p.a. Accumulating Ireland Unfunded swap
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-accIE00B53H0131 412 0.34% p.a. Accumulating Ireland Swap-based
Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - AccLU1829218749 364 0.35% p.a. Accumulating Luxembourg Unfunded swap
iShares Diversified Commodity Swap UCITS ETF (DE)DE000A0H0728 237 0.46% p.a. Accumulating Germany Unfunded swap
L&G All Commodities UCITS ETFIE00BF0BCP69 46 0.15% p.a. Accumulating Ireland Unfunded swap
Market Access Rogers International Commodity UCITS ETFLU0249326488 42 0.60% p.a. Accumulating Luxembourg Unfunded swap

Source: justETF.com; As of 12/08/20

 

Return comparison of all commodity ETFs

The table shows the returns of all commodity ETFs in comparison. All return figures are including dividends as of month end. Besides the return the reference date on which you conduct the comparison is important. In order to find the best ETFs, you can also perform a chart comparison.

ETF   1 month
in %
3 months
in %
6 months
in %
1 year
in %
3 years
in %
L&G Longer Dated All Commodities UCITS ETF 0.28% 3.51% -9.54% -11.45% -7.71%
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc -0.84% 8.83% -12.43% -15.48% -9.71%
iShares Diversified Commodity Swap UCITS ETF -0.27% 3.41% -14.15% -17.27% -15.94%
L&G All Commodities UCITS ETF -0.14% 3.56% -14.27% -17.48% -16.05%
iShares Diversified Commodity Swap UCITS ETF (DE) 0.13% 4.07% -14.37% -18.10% -17.28%
Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - Acc -1.11% 13.47% -21.01% -23.83% -19.13%
Market Access Rogers International Commodity UCITS ETF -0.22% 13.61% -21.37% -24.22% -17.96%
ETF   2020
in %
2019
in %
2018
in %
2017
in %
2016
in %
L&G Longer Dated All Commodities UCITS ETF -14.04% 10.07% -5.42% -8.90% 15.96%
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc -18.29% 10.98% -6.87% -5.89% 19.19%
iShares Diversified Commodity Swap UCITS ETF -19.11% 9.49% -7.43% - -
L&G All Commodities UCITS ETF -19.31% 9.48% -7.32% - -
iShares Diversified Commodity Swap UCITS ETF (DE) -20.56% 8.60% -6.62% -11.44% 15.17%
Market Access Rogers International Commodity UCITS ETF -27.14% 12.21% -5.89% -9.05% 15.15%
Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - Acc -27.51% 13.09% -6.71% -11.31% 12.07%

Source: justETF.com; As of 31/07/20; Calculations in EUR including dividends