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4 Commodity ETFs to Tap at New Highs

Sweta Killa

Broad commodities have bounced back sharply after a weak fourth quarter thanks to Fed’s cautious stance, which has kept U.S. dollar under pressure. A weak dollar made dollar-denominated assets attractive for foreign investors, raising the appeal for commodities.

Additionally, signs of progress in U.S.-China trade talks as well as stimulus in Chinese economy lent strong support amid global growth slowdown worries. Further, demand/supply fundamentals are improving for most of the commodities, leading them higher (read: US-China Talks Set in Washington: ETFs in Focus).

In particular, oil had a strong run-up in its prices led by fresh OPEC output cut, falling OPEC production and U.S. sanctions against Venezuela. In the precious metal space, palladium and gold have been shining. Palladium is enjoying its longest bull run in its history prompted by a global shift from diesel to gasoline and hybrid vehicles that has led to higher demand for the metal and resulted in the speculation of supply deficit. Gold is on a tear due to investors’ flight to safe havens amid still unresolved trade tensions, Brexit concerns as well as political infighting in the United States and Europe.

Industrial metals like nickel and copper are also on the rise given hopes of a trade deal that will ease slowdown concerns in the world’s second biggest economy and will boost demand. Notably, China is the top consumer of raw materials. Agricultural commodities are also staging a recovery. Coming to soft commodities, sugar has been leading the way higher with the global market swinging into deficit in the 2019-20 season. Additionally, reports of a drop in sugar output in India added to the strength.

Given this, we have highlighted a few commodity ETFs that hit new highs in the recent trading session and will continue to trend higher given the same trends persist.

Aberdeen Standard Physical Precious Metals Basket Shares ETF GLTR – 52-Week Price: $66.58

This fund seeks to reflect the performance of the price of all the precious metal in a physically backed form. Gold takes the top spot at 57.7%, followed by 25.2% in silver, 12.6% in palladium and the rest in platinum. The product has amassed $368.2 million in its asset base while trading in moderate volume of about 34,000 shares per day. It charges 60 bps in annual fees and added 5.4% so far this year. GLTR has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Precious Metal ETFs here).

SPDR Gold MiniShares Trust GLDM – 52-Week Price: $13.40

This product seeks to reflect the performance of the price of gold bullion. Being a low-cost product with expense ratio of just 0.18%, GLDM has gathered $603.6 million in AUM and trades in solid average daily volume of 712,000 shares. It has gained 4.5% so far this year (read: Can Gold ETFs Continue to Shine in 2019?)

Aberdeen Standard Physical Palladium Shares ETF PALL – 52-Week Price: $141.31

The fund seeks to match the price of palladium. It owns palladium bullion in plate or ingots kept in Zurich or London under the custody of JPMorgan Chase Bank. The product has amassed $224.5 million in its asset base and trades in lower volume of about 23,000 shares a day. It charges 60 bps in annual fees and has gained about 18.6% so far this year. The fund has a Zacks ETF Rank #3 with a High risk outlook (read: Here's Why Palladium ETF Is Soaring?)

Sprott Physical Platinum and Palladium Trust SPPP – 52-Week Price: $11.34

This product provides a secure, convenient and exchange-traded investment alternative for investors who want to hold physical platinum and palladium. It offers a number of compelling advantages over traditional exchange-traded platinum and palladium funds. The ETF has AUM of $101.5 million and charges 1.13% in annual fees. It has surged 14.2% in the year-to-date timeframe.

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Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR): ETF Research Reports
 
Aberdeen Standard Physical Palladium Shares ETF (PALL): ETF Research Reports
 
SPDR Gold MiniShares Trust (GLDM): ETF Research Reports
 
Sprott Physical Platinum and Palladium Trust (SPPP): ETF Research Reports
 
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