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Commodities generally refer to raw materials that can be traded in financial markets.

2026-08-13·x-repost-20260813-002652

Commodities generally refer to raw materials that can be traded in financial markets. They include a wide range of raw materials from the agricultural, livestock, energy, and metals sectors. Gold, silver, crude oil, natural gas, corn, wheat, soybeans, and lumber are all examples of commodities.

Commodity trading is a type of financial investment that uses the prices of key raw materials in the industrial and agricultural sectors as investment targets. These commodities can be traded through stocks, funds, futures contracts, or ETFs, allowing investors to gain exposure to commodities without holding the physical assets.

For investors, commodity trading can diversify a portfolio, help hedge risk in certain investment areas, and provide a degree of asset protection during periods of inflation. As a result, it is favored by many investors. What types of commodities are available, and how can investors trade them?

Unlike other goods, commodities are generally the basic raw materials used across various industries and have relatively stable market demand. As a result, their price movements may be somewhat predictable.

In the investment field, a variety of financial products have been developed to provide exposure to commodity prices, including stocks, futures, funds, and ETFs.

When commodity prices are used as the basis for financial investment, this is referred to as “commodity trading.” Commodity trading includes various forms of financial investment in commodities, including stocks, futures, funds, and ETFs. Commodity trading may offer the following advantages: - Commodities encompass many different products and sectors.

The factors that drive commodity prices may be linked to a broad range of economic conditions, and commodities generally have a relatively low correlation with stocks and bonds. Therefore, trading a diversified group of commodities can help spread investment risk. - In addition to diversification, commodity trading may also provide a degree of risk hedging.

For example, if an investor holds airline stocks, those stocks will generally decline when oil prices rise. Trading oil or other energy-related commodities during the same period may help hedge the risk of losses in the stock investment caused by higher oil prices. - Commodity prices generally fluctuate along with changes in inflation.

Therefore, during periods of inflation, commodity trading may help reduce some of the adverse effects of inflation. ## What Types of Commodities Are There? Commodities can generally be divided into soft commodities and hard commodities. Soft commodities refer to agricultural, livestock, and other categories, while hard commodities refer to energy and metals.

Futures contracts for these commodities are traded on major exchanges around the world, including: | Exchange Code | Exchange Name | |---|---| | CBOT | Chicago Board of Trade | | CME | Chicago Mercantile Exchange | | ICE | Intercontinental Exchange | | NYME | New York Mercantile Exchange | | | Chicago Mercantile Exchange | | DCE | Dalian Commodity Exchange

| | ZCE | Zhengzhou Commodity Exchange | | EURONEXT | European New Exchange Technology | | OSE | Osaka Exchange | | LME | London Metal Exchange | ## Energy Commodities | Commodity | Main Trading Exchanges | Trading Code | |---|---|---| | WTI Crude Oil | NYMEX, ICE | CL (NYMEX), WTI (ICE) | | Brent Crude | | | | Ethanol | | | Ethanol AC (Open Auction) ZE

(Electronic) Natural Gas NYMEX NG NBP Heating Oil HO Gulf Coast Gasoline LR RBOB Gasoline Gasoline blendstock made using a new formulation RB Propane PN Purified Terephthalic Acid (PTA) TA Data Source ## 2. Metal Commodities ### Industrial Metals Industrial metals are metal raw materials primarily used in industrial applications.

| Commodity | Main Exchange | Trading Code | |---|---|---| | Copper | | | | Lead | | | | Zinc | | | | Tin | | | | Aluminum | | | | Aluminum Alloy | | | | Nickel | | | | Cobalt | | | | Molybdenum | | | ### Precious Metals Precious metals are metal raw materials primarily used for collection and value preservation, or metals that are extremely rare.

| Commodity | Main Exchange | Trading Code | |---|---|---| | Gold | COMEX | GC | | Platinum | | PL | | Palladium | | PA | | Silver | | SI | ## 3. Agricultural Commodities ### Crops | Commodity | Trading Code | |---|---| | Corn | C/ZC (Electronic) | | Corn | EMA | | Oats | O/ZO (Electronic) | | Rough Rice | ZR | | Soybeans | S/ZS (Electronic) | | No.

2 Soybeans | Genetically modified soybeans | | Rapeseed | ECO | | Soybean Meal | SM/ZM (Electronic) | | Soy Meal | | | Soybean Oil | BO/ZL (Electronic) | | Wheat | W/ZW (Electronic) | | Wheat | EBL | | Milk | DC | | Cocoa | CC | | Coffee C | KC | | Cotton No. 2 | CT | | Sugar No. 11 | Raw cane sugar | | Sugar No.

14 | Centrifugal sugar | | Frozen Concentrated Orange Juice | FCOJ-A | | Adzuki Beans | | | Robusta Coffee | | ### Livestock | Commodity | Trading Code | |---|---| | Lean Hogs | HE | | Live Cattle | LE | | Feeder Cattle | GF | ### Forestry | Commodity | Trading Code | |---|---| | Random-Length Lumber | LBS | | Hardwood Pulp | HWP | | Softwood Pulp | WP | ## What Are the Ways to Invest in Commodities?

When commodities are introduced into the financial investment sector, they can primarily be accessed through commodity stocks, commodity exchange-traded funds (ETFs), commodity mutual funds, and commodity futures contracts. ### Buying Commodities Directly The most traditional way to invest in commodities is to purchase the physical commodities themselves.

For example, investors may buy gold bars or gold coins directly from dealers, store them securely, and sell them back to dealers when they believe the price is appropriate. Advantages: There are no third-party intermediaries, so all returns generated during the investment process belong to the investor.

Disadvantages: There must be sufficient space to properly store large quantities of commodities. Transportation costs and other expenses must also be taken into account during the trading process. ## 2. Commodity Futures Contracts Commodity futures contracts are the primary type of commodity transaction.

They originally developed from commodity traders’ expectations about future prices. Traders enter into fixed-value contracts with buyers for future transactions and, when the products are delivered on the contract’s expiration date, may earn or lose money based on the price difference. Commodity futures contracts are traded primarily on commodity exchanges.

The two largest futures exchanges in the United States are the Chicago Mercantile Exchange and the New York Mercantile Exchange. After entering the futures market, investors begin buying and selling commodity futures contracts. Overall, the trading model is similar to that of ordinary futures trading.

However, commodity futures are affected by a broader range of risk factors. The market offers a variety of commodity futures contracts. Commodity futures trading remains the riskiest among the various forms of commodity trading. ## 3. Commodity Stocks Investing in commodity stocks is the most direct investment method.

Investors can choose to invest in a company engaged in a particular commodity. For example, investors interested in metals can purchase shares of a platinum-mining company. - The investment method is simple. - There is a relatively wide range of options.

- Profit and loss are more closely tied to the company’s operating performance, while commodity prices play a less dominant role in determining investment returns. ## 4. Commodity ETFs Commodity ETFs are exchange-traded funds that combine multiple commodity stocks, funds, futures contracts, or other investments.

Like stocks, they can be bought and sold flexibly, and their prices fluctuate throughout the trading day. They are suitable for investors who want flexible trading and for whom commodity prices play a greater role in determining trading gains and losses. - Flexible trading.

- Commodity prices play a relatively greater role in determining investment gains and losses than they do in commodity stock investments. Currently, the market offers a limited number and variety of commodity ETFs. Investors seeking exposure to a specific category of commodities may need to look for suitable products through other investment methods. ## 5.

Commodity Mutual Funds Commodity mutual funds provide investors with more investment options. Fund managers use their own judgment to select and combine different products, including physical commodities, commodity stocks, and commodity futures contracts, to create commodity mutual funds.

As a result, investors can gain exposure to a broader range of investments with less capital. This can diversify investment risk while providing access to various types of commodity investments. - Commodity mutual funds contain a wider range of investment products. - Potential investment returns may decrease as risk is reduced.

Investors seeking high-risk, high-return investments may need to consider other investment products. ## What Are Commodity ETFs? A commodity ETF is a simple way to incorporate a target commodity into an individual investment portfolio.

It enables investors to gain broader exposure to different commodities and types of commodity investments without holding the physical commodities themselves. Commodity ETFs primarily include a range of financial products and derivatives, such as commodity stocks, commodity futures, and commodity price indexes.

Depending on the fund manager’s decisions, a commodity ETF may contain multiple financial products linked to a single category of commodities or multiple financial products linked to several different commodity categories. For example, the iShares S&P GSCI ETF contains futures contracts related to agriculture, livestock, and industrial metals.

Investors can choose a commodity ETF based on their investment objectives and investment preferences. The most popular commodity ETFs currently available are precious-metals ETFs, such as the gold ETF SPDR Gold Shares and the silver ETF iShares Silver Trust. Another closely watched area is energy ETFs.

Unlike precious metals, energy commodities such as oil and natural gas cannot be stored over the long term in the same way. As a result, futures contracts generally account for a larger proportion of energy commodity ETFs.

One of the best-known energy ETFs is the SPDR S&P Oil & Gas Exploration and Production ETF, which holds a diversified portfolio of 56 oil and gas companies. ## Advantages of Commodity ETFs Commodity ETFs offer more flexible trading than futures and funds.

They can be traded like stocks, and their prices fluctuate continuously throughout each trading day, making them particularly suitable for investors pursuing short-term investments. Another advantage of investing in commodity ETFs is that capital gains taxes are not incurred until the ETF is sold.

Compared with other investment products, such as mutual funds, this provides a tax advantage and is one of the reasons many investors choose to trade commodity ETFs. ## What Commodity ETFs Are Currently Available?

In addition to being traded on stock exchanges, commodity ETFs can also be accessed through accounts opened with certain asset management institutions. The following tables list asset management institutions that currently issue commodity ETFs, along with some of the major commodity ETFs available in the market.

## Financial Institutions Issuing Commodity ETFs | Institution | Assets Under Management (Billion Dollars) | Average Expense Ratio | |---|---:|---:| | BlackRock Financial Management | 6.76 | 0.50% | | Invesco | 13.31 | 0.75% | | First Trust | 4.84 | 0.95% | | ProShares | 0.01 | 0.76% | | WisdomTree | 0.36 | 0.55% | | Rafferty Asset Management | 0.42 | 0.72%

| | CICC | 1.48 | 0.79% | | Abrdn Plc | 1.45 | 0.31% | | ETFMG | 0.06 | 3.76% | | Concierge Technologies | — | 1.03% | | The Hartford | — | 0.89% | | Barclays Capital | 1.39 | 0.73% | | GraniteShares | 0.40 | 0.25% | | UBS | 0.23 | 0.53% | | Credit Suisse Group AG | 0.30 | 0.85% | | Government of Sweden | 0.16 | — | | Wainwright, Inc.

| — | 0.69% | | ORIX Corp.

| 0.04 | 0.68% | ## Commodity ETFs | ETF Ticker | Full ETF Name | Total Assets | Average Trading Volume | |---|---|---:|---:| | FUT | ProShares Managed Futures Strategy ETF | $8,142.03 | 3,597.0 | | SDCI | USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund | $10,086.80 | 13,708.0 | | KCCA | KraneShares California Carbon Allowance Strategy ETF |

$28,110.70 | 55,790.0 | | CCRV | iShares Commodity Curve Carry Strategy ETF | $40,671.70 | 10,090.0 | | BCIM | | | | | Ticker | Fund | Value | Volume | |---|---|---:|---:| | — | abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF | $40,957.10 | 12,410.0 | | HGER | Harbor All-Weather Inflation Focus ETF | $43,650.00 | N/A | | GSP | iPath S&P GSCI Total

Return Index ETN | $44,601.00 | 40,554.0 | | BCM | iPath Pure Beta Broad Commodity ETN | $57,443.70 | 12,941.0 | | BDRY | Breakwave Dry Bulk Shipping ETF | $59,496.90 | 278,113.0 | | HCOM | Hartford Schroders Commodity Strategy ETF | $60,977.10 | 19,322.0 | | UCIB | ETRACS CMCI Total Return ETN Series B | $73,879.70 | 7,068.0 | | GRN | iPath Series B Carbon

ETN | $86,554.40 | 95,060.0 | | KEUA | KraneShares European Carbon Allowance Strategy ETF | $132,271.00 | 37,808.0 | | RJI | Elements Rogers International Commodity Index–Total Return ETN | $157,011.00 | 156,822.0 | | DJCB | ETRACS Bloomberg Commodity Index Total Return ETN Series B | $159,607.00 | 4,014.0 | | FAAR | First Trust Alternative Absolute Return

Strategy ETF | $171,602.00 | 37,041.0 | | BCD | abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF | $287,380.00 | 144,198.0 | | USOI | Credit Suisse X-Links Crude Oil Shares Covered Call ETN | $304,918.00 | 1,348,349.0 | | GCC | WisdomTree Enhanced Commodity Strategy Fund | $358,500.00 | 171,792.0 | | USCI | United States Commodity Index Fund

| $361,485.00 | 90,179.0 | | CMDY | iShares Bloomberg Roll Select Commodity Strategy ETF | $387,172.00 | 77,867.0 | | COMB | GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | $404,503.00 | 137,594.0 | | COM | — | — | — | Direxion Auspice Broad Commodity Strategy ETF $424,670.00 138,802.0 BCI abrdn Bloomberg All Commodity Strategy K-1 Free ETF

$1,121,260.00 402,311.0 DJP iPath Bloomberg Commodity Index Total Return ETN $1,202,880.00 437,178.0 KRBN KraneShares Global Carbon Strategy ETF $1,319,910.00 701,624.0 GSG iShares S&P GSCI Commodity-Indexed Trust $2,151,460.00 4,021,426.0 COMT iShares U.S.

ETF Trust iShares GSCI Commodity Dynamic Roll Strategy ETF $4,178,870.00 982,356.0 DBC Invesco DB Commodity Index Tracking Fund $4,434,120.00 6,573,565.0 FTGC First Trust Global Tactical Commodity Strategy Fund $4,667,660.00 2,411,190.0 PDBC Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF $8,873,230.00 8,906,833.0 ## What Factors Should Be Considered When Investing in Commodities?

When investing in commodities, the main factors to consider are the type of commodity, the laws of supply and demand, and how to generate the highest possible return at the lowest possible cost. ### 1. Consider the Type of Commodity The most popular commodities for investment today include crude oil, gold, and industrial metals.

Crude oil: Crude oil is currently the most important energy product. In addition to being refined into gasoline, crude oil is used to produce asphalt, fertilizers, plastics, solvents, and cosmetics. Demand for crude oil is relatively stable, and it is an indispensable commodity worldwide. As a result, it has become an investment choice for many investors.

Gold: Gold investing has a long history. In the history of financial investing, gold’s performance as a hedge against inflation has made it one of the most attractive precious-metal investments. It has also become one of the choices many investors use to diversify risk.

Industrial metals: Global demand for industrial metals is second only to that for oil, which gives them a relatively stable investment market as well. There are numerous financial investment products tied to industrial metals, giving investors more choices when planning their portfolios and enabling more effective financial investing.

In addition to these categories, various commodities in agriculture and livestock also have a wide range of financial products because they are related to food and basic sustenance for the global population. ### 2.

Consider the Laws of Supply and Demand A key characteristic of commodities is that, within each individual commodity industry, suppliers generally offer essentially identical products. It is therefore difficult for differences between suppliers to create significant price differences.

For example, if Company A and Company B both supply lumber, it would be difficult for Company A to charge more simply because its product is better. However, if Company A and Company B both manufacture smartphones, Company A could potentially charge more if its products are considered better.

Therefore, in the commodities trading environment, price fluctuations are determined by the overall supply-and-demand balance. For example, during COVID-19, a reduced labor force led to lower lumber supply, causing lumber prices to surge in 2021. Similarly, the Russia-Ukraine war caused an oil shortage, resulting in a rapid increase in oil prices.

When investing in commodities, traders need to focus on the supply-and-demand relationship of the target commodity within the broader market environment. ### 3. The Highest Profit at the Lowest Cost As suppliers of raw materials to various industries, commodity sectors with lower costs tend to perform better during market fluctuations.

When market conditions fluctuate, the prices of other finished products may decline, but as long as there is still demand for a particular product, its corresponding commodity can remain profitable, even if profit margins are very low. ## What Are the Risks of Investing in Commodities?

Although the factors that influence commodity prices are broader than those affecting ordinary investments, investing in commodities still involves various risks. ### 1.

Major Risks The primary risk factors in commodity trading include global events, international competition, government regulations, import controls, and significant changes in economic conditions. These factors can have a rapid and direct impact on commodity trading.

Therefore, investors need to closely monitor policy developments in the countries and regions related to their target commodities, as well as global policy changes. ### 2.

Consider the International Economic Environment In addition to the commodities themselves, national and international policies and events related to commodity industries can create risks in commodity trading. International monetary policy can also affect commodity trading, because most commodities are traded internationally.

Changes in currency exchange rates can influence commodity price trends in the countries involved and, in turn, cause volatility in the trading market. ### 3. Excessive Asset Concentration Because there are relatively few commodity categories compared with other industries, investing in commodities can result in relatively concentrated assets.

In addition, there are currently a limited number of commodity-related ETF products. Therefore, investing exclusively in commodities can lead to excessive concentration in a single sector, making an investment portfolio more vulnerable to significant market fluctuations.

For this reason, in practice, commodity trading is more suitable as one part of an investment portfolio rather than the entire portfolio. ### 4. Other Risks Funds that primarily invest in commodities typically use futures contracts to track the price of a target commodity or a commodity price index.

However, futures investing is highly speculative and extremely.

Full text

Commodities generally refer to raw materials that can be traded in financial markets.

Commodities generally refer to raw materials that can be traded in financial markets. They include a wide range of raw materials from the agricultural, livestock, energy, and metals sectors. Gold, silver, crude oil, natural gas, corn, wheat, soybeans, and lumber are all examples of commodities. Commodity trading is a type of financial investment that uses the prices of key raw materials in the industrial and agricultural sectors as investment targets. These commodities can be traded through stocks, funds, futures contracts, or ETFs, allowing investors to gain exposure to commodities without holding the physical assets. For investors, commodity trading can diversify a portfolio, help hedge risk in certain investment areas, and provide a degree of asset protection during periods of inflation. As a result, it is favored by many investors. What types of commodities are available, and how can investors trade them? Unlike other goods, commodities are generally the basic raw materials used across various industries and have relatively stable market demand. As a result, their price movements may be somewhat predictable. In the investment field, a variety of financial products have been developed to provide exposure to commodity prices, including stocks, futures, funds, and ETFs. When commodity prices are used as the basis for financial investment, this is referred to as “commodity trading.” Commodity trading includes various forms of financial investment in commodities, including stocks, futures, funds, and ETFs. Commodity trading may offer the following advantages: - Commodities encompass many different products and sectors. The factors that drive commodity prices may be linked to a broad range of economic conditions, and commodities generally have a relatively low correlation with stocks and bonds. Therefore, trading a diversified group of commodities can help spread investment risk. - In addition to diversification, commodity trading may also provide a degree of risk hedging. For example, if an investor holds airline stocks, those stocks will generally decline when oil prices rise. Trading oil or other energy-related commodities during the same period may help hedge the risk of losses in the stock investment caused by higher oil prices. - Commodity prices generally fluctuate along with changes in inflation. Therefore, during periods of inflation, commodity trading may help reduce some of the adverse effects of inflation. ## What Types of Commodities Are There? Commodities can generally be divided into soft commodities and hard commodities. Soft commodities refer to agricultural, livestock, and other categories, while hard commodities refer to energy and metals. Futures contracts for these commodities are traded on major exchanges around the world, including: | Exchange Code | Exchange Name | |---|---| | CBOT | Chicago Board of Trade | | CME | Chicago Mercantile Exchange | | ICE | Intercontinental Exchange | | NYME | New York Mercantile Exchange | | | Chicago Mercantile Exchange | | DCE | Dalian Commodity Exchange | | ZCE | Zhengzhou Commodity Exchange | | EURONEXT | European New Exchange Technology | | OSE | Osaka Exchange | | LME | London Metal Exchange | ## Energy Commodities | Commodity | Main Trading Exchanges | Trading Code | |---|---|---| | WTI Crude Oil | NYMEX, ICE | CL (NYMEX), WTI (ICE) | | Brent Crude | | | | Ethanol | | | Ethanol AC (Open Auction) ZE (Electronic) Natural Gas NYMEX NG NBP Heating Oil HO Gulf Coast Gasoline LR RBOB Gasoline Gasoline blendstock made using a new formulation RB Propane PN Purified Terephthalic Acid (PTA) TA Data Source ## 2. Metal Commodities ### Industrial Metals Industrial metals are metal raw materials primarily used in industrial applications. | Commodity | Main Exchange | Trading Code | |---|---|---| | Copper | | | | Lead | | | | Zinc | | | | Tin | | | | Aluminum | | | | Aluminum Alloy | | | | Nickel | | | | Cobalt | | | | Molybdenum | | | ### Precious Metals Precious metals are metal raw materials primarily used for collection and value preservation, or metals that are extremely rare. | Commodity | Main Exchange | Trading Code | |---|---|---| | Gold | COMEX | GC | | Platinum | | PL | | Palladium | | PA | | Silver | | SI | ## 3. Agricultural Commodities ### Crops | Commodity | Trading Code | |---|---| | Corn | C/ZC (Electronic) | | Corn | EMA | | Oats | O/ZO (Electronic) | | Rough Rice | ZR | | Soybeans | S/ZS (Electronic) | | No. 2 Soybeans | Genetically modified soybeans | | Rapeseed | ECO | | Soybean Meal | SM/ZM (Electronic) | | Soy Meal | | | Soybean Oil | BO/ZL (Electronic) | | Wheat | W/ZW (Electronic) | | Wheat | EBL | | Milk | DC | | Cocoa | CC | | Coffee C | KC | | Cotton No. 2 | CT | | Sugar No. 11 | Raw cane sugar | | Sugar No. 14 | Centrifugal sugar | | Frozen Concentrated Orange Juice | FCOJ-A | | Adzuki Beans | | | Robusta Coffee | | ### Livestock | Commodity | Trading Code | |---|---| | Lean Hogs | HE | | Live Cattle | LE | | Feeder Cattle | GF | ### Forestry | Commodity | Trading Code | |---|---| | Random-Length Lumber | LBS | | Hardwood Pulp | HWP | | Softwood Pulp | WP | ## What Are the Ways to Invest in Commodities? When commodities are introduced into the financial investment sector, they can primarily be accessed through commodity stocks, commodity exchange-traded funds (ETFs), commodity mutual funds, and commodity futures contracts. ### Buying Commodities Directly The most traditional way to invest in commodities is to purchase the physical commodities themselves. For example, investors may buy gold bars or gold coins directly from dealers, store them securely, and sell them back to dealers when they believe the price is appropriate. **Advantages:** There are no third-party intermediaries, so all returns generated during the investment process belong to the investor. **Disadvantages:** There must be sufficient space to properly store large quantities of commodities. Transportation costs and other expenses must also be taken into account during the trading process. ## 2. Commodity Futures Contracts Commodity futures contracts are the primary type of commodity transaction. They originally developed from commodity traders’ expectations about future prices. Traders enter into fixed-value contracts with buyers for future transactions and, when the products are delivered on the contract’s expiration date, may earn or lose money based on the price difference. Commodity futures contracts are traded primarily on commodity exchanges. The two largest futures exchanges in the United States are the Chicago Mercantile Exchange and the New York Mercantile Exchange. After entering the futures market, investors begin buying and selling commodity futures contracts. Overall, the trading model is similar to that of ordinary futures trading. However, commodity futures are affected by a broader range of risk factors. The market offers a variety of commodity futures contracts. Commodity futures trading remains the riskiest among the various forms of commodity trading. ## 3. Commodity Stocks Investing in commodity stocks is the most direct investment method. Investors can choose to invest in a company engaged in a particular commodity. For example, investors interested in metals can purchase shares of a platinum-mining company. - The investment method is simple. - There is a relatively wide range of options. - Profit and loss are more closely tied to the company’s operating performance, while commodity prices play a less dominant role in determining investment returns. ## 4. Commodity ETFs Commodity ETFs are exchange-traded funds that combine multiple commodity stocks, funds, futures contracts, or other investments. Like stocks, they can be bought and sold flexibly, and their prices fluctuate throughout the trading day. They are suitable for investors who want flexible trading and for whom commodity prices play a greater role in determining trading gains and losses. - Flexible trading. - Commodity prices play a relatively greater role in determining investment gains and losses than they do in commodity stock investments. Currently, the market offers a limited number and variety of commodity ETFs. Investors seeking exposure to a specific category of commodities may need to look for suitable products through other investment methods. ## 5. Commodity Mutual Funds Commodity mutual funds provide investors with more investment options. Fund managers use their own judgment to select and combine different products, including physical commodities, commodity stocks, and commodity futures contracts, to create commodity mutual funds. As a result, investors can gain exposure to a broader range of investments with less capital. This can diversify investment risk while providing access to various types of commodity investments. - Commodity mutual funds contain a wider range of investment products. - Potential investment returns may decrease as risk is reduced. Investors seeking high-risk, high-return investments may need to consider other investment products. ## What Are Commodity ETFs? A commodity ETF is a simple way to incorporate a target commodity into an individual investment portfolio. It enables investors to gain broader exposure to different commodities and types of commodity investments without holding the physical commodities themselves. Commodity ETFs primarily include a range of financial products and derivatives, such as commodity stocks, commodity futures, and commodity price indexes. Depending on the fund manager’s decisions, a commodity ETF may contain multiple financial products linked to a single category of commodities or multiple financial products linked to several different commodity categories. For example, the iShares S&P GSCI ETF contains futures contracts related to agriculture, livestock, and industrial metals. Investors can choose a commodity ETF based on their investment objectives and investment preferences. The most popular commodity ETFs currently available are precious-metals ETFs, such as the gold ETF SPDR Gold Shares and the silver ETF iShares Silver Trust. Another closely watched area is energy ETFs. Unlike precious metals, energy commodities such as oil and natural gas cannot be stored over the long term in the same way. As a result, futures contracts generally account for a larger proportion of energy commodity ETFs. One of the best-known energy ETFs is the SPDR S&P Oil & Gas Exploration and Production ETF, which holds a diversified portfolio of 56 oil and gas companies. ## Advantages of Commodity ETFs Commodity ETFs offer more flexible trading than futures and funds. They can be traded like stocks, and their prices fluctuate continuously throughout each trading day, making them particularly suitable for investors pursuing short-term investments. Another advantage of investing in commodity ETFs is that capital gains taxes are not incurred until the ETF is sold. Compared with other investment products, such as mutual funds, this provides a tax advantage and is one of the reasons many investors choose to trade commodity ETFs. ## What Commodity ETFs Are Currently Available? In addition to being traded on stock exchanges, commodity ETFs can also be accessed through accounts opened with certain asset management institutions. The following tables list asset management institutions that currently issue commodity ETFs, along with some of the major commodity ETFs available in the market. ## Financial Institutions Issuing Commodity ETFs | Institution | Assets Under Management (Billion Dollars) | Average Expense Ratio | |---|---:|---:| | BlackRock Financial Management | 6.76 | 0.50% | | Invesco | 13.31 | 0.75% | | First Trust | 4.84 | 0.95% | | ProShares | 0.01 | 0.76% | | WisdomTree | 0.36 | 0.55% | | Rafferty Asset Management | 0.42 | 0.72% | | CICC | 1.48 | 0.79% | | Abrdn Plc | 1.45 | 0.31% | | ETFMG | 0.06 | 3.76% | | Concierge Technologies | — | 1.03% | | The Hartford | — | 0.89% | | Barclays Capital | 1.39 | 0.73% | | GraniteShares | 0.40 | 0.25% | | UBS | 0.23 | 0.53% | | Credit Suisse Group AG | 0.30 | 0.85% | | Government of Sweden | 0.16 | — | | Wainwright, Inc. | — | 0.69% | | ORIX Corp. | 0.04 | 0.68% | ## Commodity ETFs | ETF Ticker | Full ETF Name | Total Assets | Average Trading Volume | |---|---|---:|---:| | FUT | ProShares Managed Futures Strategy ETF | $8,142.03 | 3,597.0 | | SDCI | USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund | $10,086.80 | 13,708.0 | | KCCA | KraneShares California Carbon Allowance Strategy ETF | $28,110.70 | 55,790.0 | | CCRV | iShares Commodity Curve Carry Strategy ETF | $40,671.70 | 10,090.0 | | BCIM | | | | | Ticker | Fund | Value | Volume | |---|---|---:|---:| | — | abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF | $40,957.10 | 12,410.0 | | HGER | Harbor All-Weather Inflation Focus ETF | $43,650.00 | N/A | | GSP | iPath S&P GSCI Total Return Index ETN | $44,601.00 | 40,554.0 | | BCM | iPath Pure Beta Broad Commodity ETN | $57,443.70 | 12,941.0 | | BDRY | Breakwave Dry Bulk Shipping ETF | $59,496.90 | 278,113.0 | | HCOM | Hartford Schroders Commodity Strategy ETF | $60,977.10 | 19,322.0 | | UCIB | ETRACS CMCI Total Return ETN Series B | $73,879.70 | 7,068.0 | | GRN | iPath Series B Carbon ETN | $86,554.40 | 95,060.0 | | KEUA | KraneShares European Carbon Allowance Strategy ETF | $132,271.00 | 37,808.0 | | RJI | Elements Rogers International Commodity Index–Total Return ETN | $157,011.00 | 156,822.0 | | DJCB | ETRACS Bloomberg Commodity Index Total Return ETN Series B | $159,607.00 | 4,014.0 | | FAAR | First Trust Alternative Absolute Return Strategy ETF | $171,602.00 | 37,041.0 | | BCD | abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF | $287,380.00 | 144,198.0 | | USOI | Credit Suisse X-Links Crude Oil Shares Covered Call ETN | $304,918.00 | 1,348,349.0 | | GCC | WisdomTree Enhanced Commodity Strategy Fund | $358,500.00 | 171,792.0 | | USCI | United States Commodity Index Fund | $361,485.00 | 90,179.0 | | CMDY | iShares Bloomberg Roll Select Commodity Strategy ETF | $387,172.00 | 77,867.0 | | COMB | GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF | $404,503.00 | 137,594.0 | | COM | — | — | — | Direxion Auspice Broad Commodity Strategy ETF $424,670.00 138,802.0 BCI abrdn Bloomberg All Commodity Strategy K-1 Free ETF $1,121,260.00 402,311.0 DJP iPath Bloomberg Commodity Index Total Return ETN $1,202,880.00 437,178.0 KRBN KraneShares Global Carbon Strategy ETF $1,319,910.00 701,624.0 GSG iShares S&P GSCI Commodity-Indexed Trust $2,151,460.00 4,021,426.0 COMT iShares U.S. ETF Trust iShares GSCI Commodity Dynamic Roll Strategy ETF $4,178,870.00 982,356.0 DBC Invesco DB Commodity Index Tracking Fund $4,434,120.00 6,573,565.0 FTGC First Trust Global Tactical Commodity Strategy Fund $4,667,660.00 2,411,190.0 PDBC Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF $8,873,230.00 8,906,833.0 ## What Factors Should Be Considered When Investing in Commodities? When investing in commodities, the main factors to consider are the type of commodity, the laws of supply and demand, and how to generate the highest possible return at the lowest possible cost. ### 1. Consider the Type of Commodity The most popular commodities for investment today include crude oil, gold, and industrial metals. **Crude oil:** Crude oil is currently the most important energy product. In addition to being refined into gasoline, crude oil is used to produce asphalt, fertilizers, plastics, solvents, and cosmetics. Demand for crude oil is relatively stable, and it is an indispensable commodity worldwide. As a result, it has become an investment choice for many investors. **Gold:** Gold investing has a long history. In the history of financial investing, gold’s performance as a hedge against inflation has made it one of the most attractive precious-metal investments. It has also become one of the choices many investors use to diversify risk. **Industrial metals:** Global demand for industrial metals is second only to that for oil, which gives them a relatively stable investment market as well. There are numerous financial investment products tied to industrial metals, giving investors more choices when planning their portfolios and enabling more effective financial investing. In addition to these categories, various commodities in agriculture and livestock also have a wide range of financial products because they are related to food and basic sustenance for the global population. ### 2. Consider the Laws of Supply and Demand A key characteristic of commodities is that, within each individual commodity industry, suppliers generally offer essentially identical products. It is therefore difficult for differences between suppliers to create significant price differences. For example, if Company A and Company B both supply lumber, it would be difficult for Company A to charge more simply because its product is better. However, if Company A and Company B both manufacture smartphones, Company A could potentially charge more if its products are considered better. Therefore, in the commodities trading environment, price fluctuations are determined by the overall supply-and-demand balance. For example, during COVID-19, a reduced labor force led to lower lumber supply, causing lumber prices to surge in 2021. Similarly, the Russia-Ukraine war caused an oil shortage, resulting in a rapid increase in oil prices. When investing in commodities, traders need to focus on the supply-and-demand relationship of the target commodity within the broader market environment. ### 3. The Highest Profit at the Lowest Cost As suppliers of raw materials to various industries, commodity sectors with lower costs tend to perform better during market fluctuations. When market conditions fluctuate, the prices of other finished products may decline, but as long as there is still demand for a particular product, its corresponding commodity can remain profitable, even if profit margins are very low. ## What Are the Risks of Investing in Commodities? Although the factors that influence commodity prices are broader than those affecting ordinary investments, investing in commodities still involves various risks. ### 1. Major Risks The primary risk factors in commodity trading include global events, international competition, government regulations, import controls, and significant changes in economic conditions. These factors can have a rapid and direct impact on commodity trading. Therefore, investors need to closely monitor policy developments in the countries and regions related to their target commodities, as well as global policy changes. ### 2. Consider the International Economic Environment In addition to the commodities themselves, national and international policies and events related to commodity industries can create risks in commodity trading. International monetary policy can also affect commodity trading, because most commodities are traded internationally. Changes in currency exchange rates can influence commodity price trends in the countries involved and, in turn, cause volatility in the trading market. ### 3. Excessive Asset Concentration Because there are relatively few commodity categories compared with other industries, investing in commodities can result in relatively concentrated assets. In addition, there are currently a limited number of commodity-related ETF products. Therefore, investing exclusively in commodities can lead to excessive concentration in a single sector, making an investment portfolio more vulnerable to significant market fluctuations. For this reason, in practice, commodity trading is more suitable as one part of an investment portfolio rather than the entire portfolio. ### 4. Other Risks Funds that primarily invest in commodities typically use futures contracts to track the price of a target commodity or a commodity price index. However, futures investing is highly speculative and extremely.

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