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.
The best commodity ETF by 1-year fund return as of 30.06.20
| 1 | L&G Longer Dated All Commodities UCITS ETF | -10.46% | ||
| 2 | UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc | -13.64% | ||
| 3 | iShares Diversified Commodity Swap UCITS ETF | -15.90% |
All commodity ETFs ranked by fund return
The largest commodity ETF by fund size in EUR
| 1 | iShares Diversified Commodity Swap UCITS ETF | 1,271 m | ||
| 2 | L&G Longer Dated All Commodities UCITS ETF | 418 m | ||
| 3 | Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - Acc | 362 m |
All commodity ETFs ranked by fund size
The cheapest commodity ETF by total expense ratio
| 1 | L&G All Commodities UCITS ETF | 0.15% p.a. | ||
| 2 | iShares Diversified Commodity Swap UCITS ETF | 0.19% p.a. | ||
| 3 | L&G Longer Dated All Commodities UCITS ETF | 0.30% p.a. |
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 | 29 |
| 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
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 29 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 29 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
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 | 1,271 | 0.19% p.a. | Accumulating | Ireland | Unfunded swap | |
| L&G Longer Dated All Commodities UCITS ETFIE00B4WPHX27 | 418 | 0.30% p.a. | Accumulating | Ireland | Unfunded swap | |
| Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - AccLU1829218749 | 362 | 0.35% p.a. | Accumulating | Luxembourg | Unfunded swap | |
| UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-accIE00B53H0131 | 300 | 0.34% p.a. | Accumulating | Ireland | Swap-based | |
| iShares Diversified Commodity Swap UCITS ETF (DE)DE000A0H0728 | 226 | 0.46% p.a. | Accumulating | Germany | Unfunded swap | |
| L&G All Commodities UCITS ETFIE00BF0BCP69 | 45 | 0.15% p.a. | Accumulating | Ireland | Unfunded swap | |
| Market Access Rogers International Commodity UCITS ETFLU0249326488 | 41 | 0.60% p.a. | Accumulating | Luxembourg | Unfunded swap |
Source: justETF.com; As of 13.07.20
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 | 2.45% | 4.92% | -15.14% | -10.46% | -8.35% | |
| UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc | 4.06% | 9.37% | -17.40% | -13.64% | -7.82% | |
| iShares Diversified Commodity Swap UCITS ETF | 1.96% | 3.11% | -19.78% | -15.90% | - | |
| L&G All Commodities UCITS ETF | 1.68% | 3.12% | -20.00% | -16.23% | - | |
| iShares Diversified Commodity Swap UCITS ETF (DE) | 1.30% | 2.63% | -20.49% | -17.02% | -18.35% | |
| Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - Acc | 3.27% | 11.25% | -26.33% | -22.20% | -17.29% | |
| Market Access Rogers International Commodity UCITS ETF | 2.87% | 7.32% | -26.67% | -23.07% | -18.08% |
| ETF | 2020 in % |
2019 in % |
2018 in % |
2017 in % |
2016 in % |
|
|---|---|---|---|---|---|---|
| L&G Longer Dated All Commodities UCITS ETF | -14.27% | 10.07% | -5.42% | -8.90% | 15.96% | |
| UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc | -17.60% | 10.98% | -6.87% | -5.89% | 19.19% | |
| iShares Diversified Commodity Swap UCITS ETF | -18.89% | 9.49% | -7.43% | - | - | |
| L&G All Commodities UCITS ETF | -19.20% | 9.48% | -7.32% | - | - | |
| iShares Diversified Commodity Swap UCITS ETF (DE) | -20.66% | 8.60% | -6.62% | -11.44% | 15.17% | |
| Lyxor Commodities Thomson Reuters/CoreCommodity CRB TR UCITS ETF - Acc | -26.70% | 13.09% | -6.71% | -11.31% | 12.07% | |
| Market Access Rogers International Commodity UCITS ETF | -26.98% | 12.21% | -5.89% | -9.05% | 15.15% |
Source: justETF.com; As of 30.06.20; Calculations in EUR including dividends