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. Especially, 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 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 the indices mentioned. This Investment Guide will help you navigate between the peculiarities of commodity indices that vary substantially in their methodologies and ETFs that track them. It will allow you to find the most suitable ETFs for you by ranking them according to your preferences.

0.30% p.a. - 0.70% p.a.
annual total expense ratio (TER) of commodity ETFs
on commodities, which is tracked by ETFs
on commodities
The best indices for commodity ETFs

The best commodity ETF by 1-year fund return as of 30.09.17

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 or [1] current weights as of 31/01/2017

 

Methodologies of the most important commodity indices

Bloomberg Commodity Commerzbank Commodity ex-Agriculture EW Rogers International Commodity (RICI)
Number of ETFs 1 ETF 1 ETF 1 ETF
Number of commodities 20 12 37
Index review annually semi-annually annually
Selection critieria Economic significance (production), diversification, continuity and liquidity Liquidity and importance Global consumption and liquidity
Index weighting 1/3 production
2/3 liquidity
Equal weight Global consumption (reviewed by the RICI committee)
Cap on single commodity 15% 8.33% -
Cap on commodities segment 33% - -
 
S&P GSCI© Energy & Metals Capped Commodity 35/20 Thomson Reuters/ CoreCommodity CRB UBS Bloomberg CMCI
Number of ETFs 0 ETFs 1 ETF 1 ETF
Number of commodities 19 27
Index review annually monthly monthly
Selection criteria Global production (last 5 years) Liquidity and importance (reviewed by a committee) Fundamental factors and liquidity
Index weighting Global production Grupped by liquidity and equally weighted in four groups 2/3 fundamental factors
1/3 liquidity
Cap on single commodity 35% largest commodity
20% all others
- 35% largest commodity
20% all others
Cap on commodities segment - - -

Source: justETF Research; As of 31/01/2017

 

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 also considered when weighting the index components. Currently, the Bloomberg Commodity index tracks 20 commodities from the energy, precious metals, industrial metals, livestock and agriculture segments.

 

Methodology of the Bloomberg Commodity Factsheet Methodology

  • Broad commodities basket of 20 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 on the 14/07/1998

Further subindices

Bloomberg Commodity (EUR Hedged)
Bloomberg Commodity 3 Month Forward

 

Commerzbank Commodity (CoCo) ex-Agriculture EW Index

The Commerzbank Commodity (CoCo) ex-Agriculture EW Index tracks the 12 most liquid and important commodities represented in the form of futures contracts. Initially all commodities are equally weighted, reviewed semi-annually.

 

Methodology of the Commerzbank Commodity (CoCo) ex-Agriculture EW Factsheet Methodology

  • Broad commodities basket of 12 components
  • Most liquid and important commodities from the energy, industrial metals and precious metals segments
  • Semiannual index review and rebalancing
  • Roll period is monthly
  • All commodities are equally weighted
  • The index was introduced on the 27/03/2012

Further subindices

Commerzbank Commodity (CoCo) ex-Agriculture (EUR Hedged)

 

Rogers International Commodity (RICI) Index

The Rogers International Commodity (RICI) Index is a broad commodities index that tracks 37 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 commodity basket of 37 Rohstoffen
  • Index weight 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 introducted in 1998
 

Thomson Reuters/CoreCommodity CRB Index

The 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, in which they are weighted equally. The first group contains pretroleum products and is capped at 33%. The second group contains seven highly liquid commodities and is capped at 42%. The third group contains four liquid commodities capped at 20% and the last group is capped at 5%.

 

Methodology of the Thomson Reuters/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 weight is rebalanced on a monthly basis
  • Monthly roll period
  • The index was introduced on the 03/01/1994

Further subindices

Thomson Reuters/CoreCommodity CRB Non-Energy
Thomson Reuters/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 by economic indicators like CPI, PPI, and GDP. Secondary factor is market liquidity.
  • Largest commodity is capped at 35% and all other commodities are capped at 20%
  • Constant maturity to reduce the negative roll yield
  • Index is rebalanced on a monthly basis
  • Daily roll period
  • The index was introduced in 2007

Further subindices

UBS Bloomberg CMCI (EUR Hedged)
UBS Bloomberg CMCI Ex Agriculture Ex Livestock Capped
UBS Bloomberg CMCI Ex Agriculture Ex Livestock Capped (EUR Hedged)

 
 

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
Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF C-EURFR0010270033 871 0.35% p.a. Accumulating France Unfunded swap
iShares Diversified Commodity Swap UCITS ETF (DE)DE000A0H0728 864 0.46% p.a. Accumulating Germany Funded swap
ETFS Longer Dated All Commodities GO UCITS ETFDE000A1CXBV8 461 0.30% p.a. Accumulating Ireland Unfunded swap
ComStage Commerzbank Commodity ex-Agriculture EW Index TR UCITS ETFLU0419741177 386 0.30% p.a. Accumulating Luxembourg Unfunded swap
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-accIE00B53H0131 334 0.37% p.a. Accumulating Ireland Swap-based
Market Access Rogers International Commodity UCITS ETFLU0249326488 61 0.70% p.a. Accumulating Luxembourg Unfunded swap

Source: justETF.com; As of 21.10.17

 

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 %
ComStage Commerzbank Commodity ex-Agriculture EW Index TR UCITS ETF 1.41% 5.07% -6.27% 0.23% -21.55%
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc 3.36% 1.78% -7.79% -0.60% -20.16%
Market Access Rogers International Commodity UCITS ETF 4.36% 0.60% -9.36% -4.01% -28.69%
ETFS Longer Dated All Commodities GO UCITS ETF 2.79% -0.59% -9.10% -4.38% -19.47%
iShares Diversified Commodity Swap UCITS ETF (DE) 2.46% -1.32% -10.14% -6.13% -25.28%
Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF C-EUR 4.31% 1.13% -10.25% -6.61% -30.56%
ETF   2017
in %
2016
in %
2015
in %
2014
in %
2013
in %
ComStage Commerzbank Commodity ex-Agriculture EW Index TR UCITS ETF -6.17% 24.53% -23.84% -5.19% -12.23%
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc -10.30% 19.19% -16.30% -8.66% -11.72%
ETFS Longer Dated All Commodities GO UCITS ETF -11.82% 15.96% -15.03% -4.37% -13.48%
Market Access Rogers International Commodity UCITS ETF -12.90% 15.15% -18.62% -12.42% -9.64%
iShares Diversified Commodity Swap UCITS ETF (DE) -13.89% 15.17% -18.65% -6.64% -12.80%
Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF C-EUR -15.06% 12.07% -15.21% -7.19% -9.76%

Source: justETF.com; As of 30.09.17; Calculations in EUR including dividends