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 30/11/2023

All commodity ETFs ranked by fund return

 

The largest commodity ETF by fund size in GBP

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)
Number of ETFs 5 ETFs 1 ETF
Number of commodities 23 38
Index review annually annually
(index is rebalanced monthly)
Selection criteria Economic significance (production), diversification, continuity and liquidity Global consumption and liquidity (reviewed by a committee)
Index weighting 1/3 production
2/3 liquidity
Global consumption and liquidity (reviewed by a committee)
Cap on single commodity 15% -
Cap on commodities segment 33% -
 
Optimised Roll Commodity UBS CMCI
Number of ETFs 2 ETFs 1 ETF
Number of commodities 23 28
Index review annually annually
(index is rebalanced monthly)
Selection criteria Economic significance (production), diversification, continuity and liquidity Fundamental factors and liquidity
Index weighting 1/3 production
2/3 liquidity
Fundamental factors and liquidity
Cap on single commodity 15% 35% largest commodity
20% all others
Cap on commodities segment 33% -

Source: justETF Research; As of 31/05/2021

 

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
 

Optimised Roll Commodity Index

The Optimised Roll Commodity index is based on the Bloomberg Commodity index in terms of composition and target weighting of the various commodities. Thus, commodities are selected and weighted according to their economic significance. Diversification, continuity and market liquidity are also taken into account. As the Bloomberg Commodity index, the Optimised Roll Commodity index tracks 23 commodities from the energy, precious metals, industrial metals, livestock and agriculture segments. The Optimised Roll Commodity index aims to outperform the Bloomberg Commodity index over the long term by optimising roll returns. To achieve this, the maturity of new futures contracts is adjusted monthly based on liquidity criteria.

 

Methodology of the Optimised Roll Commodity Factsheet Methodology

  • Broad commodities basket of 23 components
  • Index composition and target weights are identical to the Bloomberg Commodity index
  • Commodities are selected by economic significance (production), diversification, continuity and market liquidity
  • Annual index review and rebalancing
  • Maturity of futures contracts is adjusted monthly to optimise roll return
  • Single commodity is capped at 15%
  • Commodities segment is capped at 33%
 

UBS CMCI Index

The UBS CMCI index tracks 28 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 CMCI Factsheet Methodology

  • Broad commodities basket of 28 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
 

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 GBP
TER
in %
Use of profits Fund domicile Replication method
Invesco Bloomberg Commodity UCITS ETF AccIE00BD6FTQ80 1,701 0.19% p.a. Accumulating Ireland Unfunded swap
iShares Diversified Commodity Swap UCITS ETFIE00BDFL4P12 1,165 0.19% p.a. Accumulating Ireland Unfunded swap
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-accIE00B53H0131 1,041 0.34% p.a. Accumulating Ireland Swap-based
L&G Longer Dated All Commodities UCITS ETFIE00B4WPHX27 352 0.30% p.a. Accumulating Ireland Unfunded swap
WisdomTree Enhanced Commodity UCITS ETF USDIE00BZ1GHD37 195 0.35% p.a. Distributing Ireland Unfunded swap
WisdomTree Broad Commodities UCITS ETFIE00BKY4W127 192 0.19% p.a. Accumulating Ireland Unfunded swap
WisdomTree Enhanced Commodity UCITS ETF USD AccIE00BYMLZY74 142 0.35% p.a. Accumulating Ireland Unfunded swap
WisdomTree Broad CommoditiesGB00B15KY989 77 0.49% p.a. Accumulating Jersey Swap-based
Market Access Rogers International Commodity UCITS ETFLU0249326488 50 0.60% p.a. Accumulating Luxembourg Unfunded swap
L&G All Commodities UCITS ETFIE00BF0BCP69 48 0.15% p.a. Accumulating Ireland Unfunded swap
Xtrackers Bloomberg Commodity Swap UCITS ETF 1CLU2278080713 4 0.19% p.a. Accumulating Luxembourg Unfunded swap
WisdomTree Broad Commodities Longer DatedJE00B24DMC49 3 0.49% p.a. Accumulating Jersey Swap-based

Source: justETF.com; As of 10/12/2023

 

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 %
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc -5.17% -1.48% 6.10% -4.68% 72.85%
Market Access Rogers International Commodity UCITS ETF -6.43% -2.62% 5.83% -10.54% 74.65%
Xtrackers Bloomberg Commodity Swap UCITS ETF 1C -5.22% -2.22% 3.47% -10.60% -
L&G Longer Dated All Commodities UCITS ETF -5.33% -2.25% 3.45% -10.72% 66.76%
WisdomTree Broad Commodities Longer Dated -5.45% -2.06% 3.26% -12.46% 58.45%
WisdomTree Enhanced Commodity UCITS ETF USD -5.34% -2.40% 3.29% -12.62% 49.35%
L&G All Commodities UCITS ETF -6.12% -2.72% 4.47% -12.75% 53.43%
WisdomTree Enhanced Commodity UCITS ETF USD Acc -5.43% -2.54% 3.23% -12.75% 49.35%
iShares Diversified Commodity Swap UCITS ETF -6.17% -2.56% 4.31% -12.93% 52.00%
Invesco Bloomberg Commodity UCITS ETF Acc -6.06% -2.73% 4.39% -13.02% 51.36%
WisdomTree Broad Commodities UCITS ETF -6.11% -2.71% 4.37% -13.04% -
WisdomTree Broad Commodities -5.97% -2.26% 4.09% -13.40% 49.83%
ETF   2023
in %
2022
in %
2021
in %
2020
in %
2019
in %
UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc -4.69% 30.73% 35.56% -1.86% 5.55%
Market Access Rogers International Commodity UCITS ETF -8.73% 32.54% 39.78% -11.84% 6.73%
Xtrackers Bloomberg Commodity Swap UCITS ETF 1C -9.63% 33.72% - - -
WisdomTree Enhanced Commodity UCITS ETF USD -9.76% 26.81% 27.93% -1.56% 3.93%
WisdomTree Enhanced Commodity UCITS ETF USD Acc -9.80% 26.87% 27.86% -1.50% 3.91%
L&G Longer Dated All Commodities UCITS ETF -9.84% 33.54% 34.39% -0.28% 4.66%
L&G All Commodities UCITS ETF -10.28% 29.83% 28.59% -6.52% 4.21%
iShares Diversified Commodity Swap UCITS ETF -10.44% 29.13% 28.13% -6.27% 4.36%
WisdomTree Broad Commodities UCITS ETF -10.51% 29.17% - - -
Invesco Bloomberg Commodity UCITS ETF Acc -10.63% 28.79% 28.33% -6.29% 4.21%
WisdomTree Broad Commodities Longer Dated -10.85% 30.44% 31.86% -0.56% 3.84%
WisdomTree Broad Commodities -10.91% 28.40% 27.01% -5.40% 3.62%

Source: justETF.com; As of 30/11/2023; Calculations in GBP including dividends