Most Affordable Commodity ETFs

Investopedia

Exchange traded funds (ETFs) are uniquely structured investments that track indexes, baskets of assets or commodities. Since the first ETF was launched 20 years ago, the ETF industry has grown into a trillion-dollar business. This growth is due in part to the relative ease with which ETFs can be bought and sold, the ability to sell short and purchase ETFs on margin and the exposure that ETFs provide to commodities - as asset class that not long ago was impractical for individual investors because of the inconvenience and costs associated with transporting, storing and insuring the various commodities. Today's investors and traders can gain exposure to commodities through a growing number of exchange traded funds. Here are the top 10 most affordable commodity ETFs (in terms of expense ratio) for agricultural, diversified, industrial metals, oil and gas and precious metals ETFs.

Agricultural Commodity ETFs
Agricultural commodity products include grains and oilseeds, livestock, dairy, forest and the softs - cocoa, coffee, cotton and sugar. Of the 10 ag ETFs with the lowest expense ratio (shown below), the Dow Jones-UBS Coffee ETN (JO) stands out for its volume with a three-month average of 108,003. Launched on June 24, 2008, the fund invests in a single coffee futures contract, which is continuously rolled-over.

Ticker

Description

Commodity

Expense Ratio

TAGS

Agricultural Fund

Broad

0.32%

FUD

E-TRACS UBS Bloomberg CMCI Food ETN

Food

0.65%

UAG

E-TRACS UBS Bloomberg CMCI Agric ETN

Broad

0.65%

LSTK

Pure Beta Livestock ETN

Broad

0.75%

JJS

DJ-UBS Softs Total Return Sub-Index ETN

Broad

0.75%

JO

DJ-UBS Coffee ETN

Coffee

0.75%

NIB

DJ-UBS Cocoa Total Return Sub-Index ETN

Cocoa

0.75%

SGAR

Pure Beta Sugar ETN

Sugar

0.75%

WEET

Pure Beta Grains ETN

Grains

0.75%

SGG

DJ-UBS Sugar Sub-Index Total Return ETN

Sugar

0.75%


The top 10 agricultural ETFs with the lowest expense ratios
.Diversified Commodity ETFs
The funds in this category invest in a variety of commodities. In terms of volume, Rogers Intl Commodity ETN (RJI) beats out the competition with an average three-month volume of 449,421. RJI, which was launched on July 31, 1998, represents the value of 36 commodity futures contracts, including agricultural, energy and metals products. The Dow-Jones UBS Commodity Index (DJP) and the S&P GSCI Total Return Index (GSP) both trade under considerable volume as well with average three-month volumes of 311,067 and 215,057, respectively.

Ticker

Description

Commodity

Expense Ratio

DJCI

DJ-UBS Commodity Index Total Return ETN

Broad

0.50%

BNPC

Stream S&P Dynamic Roll Global Commodities Fund

Broad

0.65%

UCI

E-TRACS UBS Bloomberg CMCI ETN

Broad

0.65%

BLND

DJ-UBS Commodity Index 2-4-6 Blended Futures ETN

Broad

0.70%

GSP

S&P GSCI Total Return Index ETN

Broad

0.75%

RJI

Rogers Intl Commodity ETN

Broad

0.75%

SBV

Pure Beta S&P GSCI-Weighted ETN

Broad

0.75%

GSG

GSCI Commodity-Indexed Trust Fund

Broad

0.75%

DJP

DJ-UBS Commodity Index TR ETN

Broad

0.75%

BCM

Pure Beta Broad Commodity ETN

Broad

0.75%


The top 10 diversified commodity ETFs with the lowest expense ratios.
Industrial Metals ETFs
Industrial metals include copper, lead, zinc, tin, aluminum, nickel, cobalt, molybdenum and recycled steel. We have listed the top 10 funds having the lowest expense ratios. Most of these ETFs trade under somewhat low volume, with the exception of the Rogers Intl Commodity Metal ETN (RJZ) which has an average three-month volume of 24,372. Launched on Oct. 17, 2007, the fund attempts to track the performance of the Rogers International Commodity Index - Metals Total Return Index. The Index represents the value of a basket of 10 metals commodity futures contracts.

Ticker

Description

Commodity

Expense Ratio

CPER

United States Copper Index Fund

Copper

0.65%

UBM

E-TRACS UBS Bloomberg CMCI Ind Metal ETN

Broad

0.65%

USMI

United States Metals Index Fund

Broad

0 .70%

LD

DJ-UBS Lead Total Return Sub-Index

Lead

0.75%

JJU

DJ-UBS Aluminum total Return Sub-Index ETN

Aluminum

0.75%

LEDD

Pure Beta Lead ETN

Lead

0.75%

RJZ

Rogers Intl Commodity Metal ETN

Broad

0.75%

JJT

DJ-UBS Tin Total Return Sub-Index ETN

Tin

0.75%

NINI

Pure Beta Nickel ETN

Nickel

0.75%

JJN

DJ-UBS Nickel Total Return Sub-Index ETN

Nickel

0.75%


The top 10 industrial metals ETFs with the lowest expense ratios.

The oil and gas ETFs are comprised of a variety of funds that invest in energy products such as oil, gas and natural gas. Of the commodity ETFs, the oil and gas ETFs are some of the most heavily traded. The United States Natural Gas Fund (UNG) leads the pack with an average three-month volume of more than 7.8 million. Launched on April 18, 2007, UNG invests in natural gas futures contracts . The United States Oil Fund (USO) also trades under high volume, with more than 5.8 million in average three-month volume. USO, which was launched on April 10, 2006, tracks changes in the price of light and sweet crude-oil-holding futures contracts in WTI Crude.

Ticker

Description

Commodity

Expense Ratio

USO

United States Oil Fund

Crude Oil

0.45%

UGA

United States Gasoline Fund LP

Gasoline

0.60%

UHN

United States Diesel Heating Oil Fund

Heating Oil

0.60%

UNG

United States Natural Gas Fund LP

Natural Gas

0.60%

USL

United States 12 Month Oil

Crude Oil

0.60%

UBN

E-TRACS UBS Bloomberg CMCI Energy ETN

Broad

0.65%

ONG

Pure Beta Energy ETN

Broad

0.75%

RJN

Rogers Intl Commodity Energy ETN

Broad

0.75%

UNL

United States 12 Month Natural Gas Fund

Natural Gas

0.75%

OLO

DB Crude Oil Long ETN

Crude Oil

0.75%


The top 10 gas and oil ETFs with the lowest expense ratios.

Precious Metal ETFs
The precious metal ETFs include those that invest in physical commodities and futures contracts for gold, silver, platinum and palladium. Like oil and gas ETFs, the precious metals ETFs trade under significant volume. Of the 10 we have listed below that have the lowest expense ratios, the Silver Trust (SLV) has an impressive average three-month volume of more than 11 million. With an inception date of April 21, 2006, SLV is designed to track the spot price of silver bullion, holding 100% physical silver bullion. The SPDR Gold Trust (GLD) also trades under high volume, with an average three-month volume of nearly 10 million. Launched on Nov. 18, 2004, GLD invests in physical gold bullion .

Ticker

Description

Commodity

Expense Ratio

IAU

COMEX Gold Trust

Gold

0.25%

UBG

E-TRACS UBS Bloomberg CMCI Gold ETN

Gold

0.30%

SIVR

Physical Silver Shares

Silver

0.30%

SGOL

Physical Swiss Gold Shares

Gold

0.39%

AGOL

Physical Asian Gold Shares

Gold

0.39%

USV

E-TRACS UBS Bloomberg CMCI Silver ETN

Silver

0.40%

GLD

SPDR Gold Trust

Gold

0.40%

SLV

Silver Trust

Silver

0.50%

PPLT

Physical Platinum Shares

Platinum

0.60%

GLTR

Physical Precious Metal Basket Shares

Broad

0.60%


The top 10 precious metals ETFs with the lowest expense ratios.

The Bottom Line
While these ETFs are ranked based on expense ratio, other factors must be considered when determining the affordability or suitability of any exchange traded funds. As with any investment, it is important to perform appropriate research prior to making any investment decisions.



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