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Jim Rogers: Commodities ETFs to Benefit from Monetary Easing, Supply Issues


Noted investor and author Jim Rogers says index-based commodity ETFs will be an easy-to-use strategy for investors to profit from supply shortages in natural resources combined with easy monetary policies from central banks around the world.

Speaking Wednesday at the 2013 ETF Virtual Summit, Rogers pointed out that world governments have gotten to the habit of printing money in the wake of the financial crisis. [Jim Rogers: Use Commodity ETFs to Profit from Supply Shortages]

There are several exchange traded products based on commodity indices designed by Rogers.

For example, Royal Bank of Scotland issues a family of exchange traded notes tied to the benchmarks, including RBS Rogers Enhanced Agriculture ETN (RGRA) and RBS Rogers Enhanced Commodity Index ETN (RGRC).

Also, Van Eck manages the Market Vectors RVE Hard Assets Producers ETF (HAP) , which tracks an index developed with Rogers.

Rogers noted that the new Japanese Prime Minister, Shinzo Abe, won his election on promises to increase quantitative easing to jumpstart the stagnating economy. Consequently, the Japanese yen has been depreciating and Japanese equities have been rallying on the optimistic outlook. [Currency ETFs: Everyone Hates the Japanese Yen]

  • CurrencyShares Japanese Yen Trust (FXY)

  • iShares MSCI Japan Index Fund (EWJ)

  • WisdomTree Japan Hedged Equity Fund (DXJ)

  • db-X MSCI Currency Hedge Equity Fund (DBJP)

It all may sound good and feel good to investors, “but by the end of 2013, all this will be wearing off,” Rogers warned. “We will see serious problems and ramifications down the road.” [PIMCO Total Return ETF’s Bill Gross: Stimulus ‘Increasingly Ineffective’]

Rogers believes that investors will be able to find opportunities in natural resources as there are “supply problems in all commodities going forward.”

“We will make money in commodities because of supply shortages … and governments will print money,” Rogers added.

  • RBS Rogers Enhanced Commodity Index ETN (RGRC)

  • PowerShares DB Commodity Index Tracking Fund (DBC)

  • iPath DJ-UBS Commodity Index ETN (DJP)

In the metals space, Rogers is looking at base metals over precious metals.

“I suspect base metals benefit as they are down so much that they would be in a better place than precious metals,” Rogers said. “I would not be selling my base metals.”

  • RBS Rogers Enhanced Industrial Metals ETN (RGRI)

  • PowerShares DB Base Metals Fund (DBB)

Additionally, Rogers is leaning toward agriculture and natural gas, which he says have been oversold. Looking at the agriculture market, the world is consuming more than is produced by farmers. Some areas of the world are witnessing a food shortage.

  • RBS Rogers Enhanced Agriculture ETN (RGRA)

  • PowerShares DB Agriculture Fund (DBA)

  • ELEMENTS Rogers International Commodity Agriculture ETN (RJA)

  • United States Natural Gas Fund (UNG)

“We are running out of farmers,” Rogers said. “No one is going into farming. The old are getting out and the young aren’t coming in.”

He said indexed ETFs are “the best way for everyone to invest in everything.” ETFs make getting exposure to commodities as simple as buying individual stocks, Rogers added.

For more information on commodities, visit our commodity ETFs category.

Story updated with information on exchange traded products based on Rogers indices.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.