Commodities: Broad Market

BCM Top Performer Intra-day
Price $27.76
Today’s Change 0.00%(0.00)
4:00pm 02/27/2017
BCM Bottom Performer Intra-day
Price $27.76
Today’s Change 0.00%(0.00)
4:00pm 02/27/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The broad commodity ETF space has no clear winner. There's no "right" way to index commodities, so many disparate choices here are equally valid.
We've chosen toDBC isn't perfectly neutral, but its strategy makes sense benchmark against the popular S&P GSCI, a production-weighted index which gives nearly 3/4 of its weight to energy, and nearly 1/2 to oil alone. Two funds—GSG and GSP—track this index directly, while others track variations.
Another established choice is the Bloomberg Commodity index (formerly the Dow Jones-UBS Commodity Index). It takes a more nuanced view by weighting its components by both production and liquidity, and capping exposures at both the commodity and sector levels. DJCI and DJP track it directly.
Alternative strategies abound, with funds that select and/or weight their holdings by things like consumption, contango, or momentum. At the extreme is FTGC, the first actively-managed commodity ETF.
Many funds in the space attempt to mitigate the effects of contango. This could be as simple as holding a fixed ladder of contracts up to a year out, or it could mean complex optimization schemes. Most of these funds cost more than their front-month counterparts.
You'll also need to make a decision about structure. Commodity pools have complex tax implications that could help or hinder you. ETNs are simpler at tax time, but come with counterparty risk.
Finally, you'll need to be sure the fund you want is accessible. Traders who demand liquidity above all else will want to stick with DBC or DJP, but plenty of other options exist for those who don't mind slightly higher trading costs. Be aware that about half the funds in the segment see subpar tradability, ranging from somewhat illiquid to untradeable at all sizes. A handful of funds are at risk of closure due to weak investor interest.
We've chosen DBC as our Analyst Pick. It isn't perfectly neutral, but its strategy makes sense—it caps our benchmark's heavy weighting to energy, while optimizing contract selection. It's also eminently liquid. (Insight updated 02/27/17)

All Funds (21)

GCC $212.15 M 212151161.745 Expensive

B 5
E
84
84
T
90
90
F
5
5

PDBC $708.3 M 708296760 New; No K-1

B 0
E
79
79
T
97
97
F
0
-1

GSG $1.12 B 1117287780 Commodity pool version of GSP

C 91
E
68
68
T
97
97
F
91
91

DJCI $131.34 M 131339602.464 Cheapest in segment

C 48
E
83
83
T
61
61
F
48
48

DBC $2.52 B 2518000845.5001 Most liquid

C 26
E
63
63
T
98
98
F
26
26

BCM $51.26 M 51259409.8509 Optimized version of DJP

C 24
E
83
83
T
65
65
F
24
24

DJP $955.63 M 955633214.239 Liquid ETN

C 18
E
72
72
T
99
99
F
18
18

USCI $560.43 M 560434972.5 Selects by contango

C 11
E
67
67
T
97
97
F
11
11

FTGC $141.15 M 141154967.86436 Active 40 Act ETF

C 0
E
72
72
T
95
95
F
0
-1

UCI $99.67 M 99674216.1324 Cheap alternative take

C 0
E
78
78
T
58
58
F
0
-1

SBV $664.19 K 664191.154 High closure risk

D 62
E
73
73
T
59
59
F
62
62

RJI $253.0 M 253000000 Broadest exposure

D 28
E
57
57
T
82
82
F
28
28

CMDT $23.83 M 23826985 High closure risk

D 0
E
74
74
T
55
55
F
0
-1

GSP $29.18 M 29181305.9064 ETN version of GSG

D 0
E
59
59
T
66
66
F
0
-1

GSC $114.83 M 114828400 Very expensive

F 88
E
51
51
T
45
45
F
88
88

CSCR $1.07 M 1072974.76063 High closure risk

F 16
E
63
63
T
38
38
F
16
16

DWAC $6.17 M 6173549.388 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

RCOM $15.51 M 15507051.69 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

UCIB $21.77 M 21767400 same index as UCI

N/A 0
E
0
-1
T
0
-1
F
0
-1

DPU $394.8 K 394800 Closed to creations

F 62
E
66
66
T
30
30
F
62
62

CSCB $1.11 M 1110000 High closure risk

D 32
E
76
76
T
37
37
F
32
32

ETF.com Grade as 02/23/17

Commodities: Broad Market

Performance Dispersion
Performance  [as of 02/24/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: S&P GSCI-0.95%5.05%-1.29%20.61%-21.76%-15.05%--
B 5GCC212151161.745GCCWisdomTree Continuous Commodity Index Fund-1.99%1.29%1.91%9.63%-10.83%-9.18%--
B 0PDBC708296760PDBCPowerShares Optimum Yield Diversified Commodity Strategy No K-1 Portfolio-1.09%3.98%-0.58%24.99%------
C 91GSG1117287780GSGiShares S&P GSCI Commodity Indexed Trust-0.96%4.83%-1.60%18.80%-22.52%-15.78%-9.22%
C 48DJCI131339602.464DJCIETRACS Bloomberg Commodity Index Total Return ETN-1.12%2.63%0.21%15.96%-13.92%-10.76%--
C 26DBC2518000845.5001DBCPowerShares DB Commodity Index Tracking Fund-1.32%3.84%-0.88%24.41%-15.79%-11.98%-4.25%
C 24BCM51259409.8509BCMiPath Pure Beta Broad Commodity ETN-0.57%4.02%1.68%18.52%-12.34%-10.09%--
C 18DJP955633214.239DJPiPath Bloomberg Commodity Index Total Return ETN-1.55%2.80%-0.17%17.43%-14.90%-11.55%-7.21%
C 11USCI560434972.5USCIUnited States Commodity Index Fund-1.93%-4.11%0.25%1.37%-11.55%-9.09%--
C 0FTGC141154967.86436FTGCFirst Trust Global Tactical Commodity Strategy Fund-2.00%0.30%0.69%4.42%-15.40%----
C 0UCI99674216.1324UCIETRACS UBS Bloomberg Constant Maturity Commodity Index TR ETN-1.43%3.58%1.97%25.04%-11.70%-9.21%--
D 62SBV664191.154SBViPath Pure Beta S&P GSCI-Weighted ETN1.11%4.23%0.05%21.84%-19.87%-12.93%--
D 28RJI253000000RJIElements Rogers International Commodity Index-Total Return ETN-0.95%3.77%0.77%21.06%-14.98%-10.85%--
D 0CMDT23826985CMDTiShares Commodity Optimized Trust-1.38%2.93%-0.21%15.12%-11.77%----
D 0GSP29181305.9064GSPiPath S&P GSCI Total Return Index ETN-0.48%6.18%-1.16%24.06%-24.44%-17.24%-9.88%
F 88GSC114828400GSCGS Connect S&P GSCI Enhanced Commodity TR Strategy ETN-1.45%5.33%-1.39%23.88%-21.85%-15.74%--
F 16CSCR1072974.76063CSCRCredit Suisse X-Links Commodity Rotation ETN2.04%0.91%2.11%11.27%-9.99%----
N/A 0DWAC6173549.388DWACElkhorn Commodity Rotation Strategy ETF-3.09%1.06%0.69%--------
N/A 0RCOM15507051.69RCOMElkhorn Fundamental Commodity Strategy ETF-0.19%2.01%2.54%--------
N/A 0UCIB21767400UCIBETRACS CMCI Total Return ETN Series B-1.08%8.07%2.92%28.66%------
F 62DPU394800DPUDB Commodity Long ETN51.99%7.14%7.14%-15.20%-17.69%-14.92%--
D 32CSCB1110000CSCBCredit Suisse X-Links Commodity Benchmark ETN0%-10.77%0%-20.43%------
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

DJCI has an edge over its peers in Efficiency thanks to a lowest-in-class expense ratio, excellent tracking and a tax-advantaged structure. The ETN charges just 50 bps, lags its indexFor those willing to pay a bit more, the range of options widens considerably within by roughly the amount of its fee, and is taxed at ordinary capital gains rates. In contrast, the remaining funds charge 55-125 bps and many follow their indexes at a much wider pace.
That said, most funds in the broad commodities segment are at least viable, and track more or less in line with their fees. For those investors willing to pay a bit more, the range of options widens considerably.
One of the more important considerations here is fund structure. Most of the segment is made up of ETNs, which are taxed at normal capital gains rates and have no special tax implications. They do, however, come with counterparty risk—currently low for all funds.
A handful of funds are structured as commodity pools. These distribute a K-1 at tax time and are marked to market, meaning you will be taxed on all gains and losses at year-end whether you sell or not, at a blended long-term/short-term rate.
Two somewhat recent launches, FTGC and PDBC, are structured as open-ended 1940 Act funds. That's the most common structure for equity funds, but it was unheard of in the commodity space until 2013.
About 1/3 of the funds in this segment are at high risk of closure due to little or no investor interest. Most of these are ETNs, which sometimes "close" by de-listing without returning capital, leaving investors to either hold their shares until a distant maturity date or try to sell them OTC, a particularly nasty dilemma. We recommend caution in holding these funds. (Insight updated 02/27/17)

All Funds (21)

84
83.968253
83
83.090478
83
82.913701
79
78.535327
78
78.291294
74
74.041084
73
73.118432
72
72.223167
72
72.01386
68
68.056718
67
67.209776
63
62.754842
63
62.742992
59
59.224887
57
56.810792
51
51.204719
N/A
0
N/A
0
N/A
0
66
66.14409643339
76
75.505219103754

ETF.com Grade as 02/23/17

Commodities: Broad Market

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
UCI ETRACS UBS Bloomberg Constant Maturity Commodity Index TR ETN 0.55% -- -- -- 20.00% / 39.60% Low 78.291294
DJP iPath Bloomberg Commodity Index Total Return ETN 0.70% -1.45% 2.50% -3.37% 20.00% / 39.60% Low 72.223167
UCIB ETRACS CMCI Total Return ETN Series B 0.55% -- -- -- 20.00% / 39.60% High 0
USCI United States Commodity Index Fund 1.02% -1.30% -0.89% -1.66% 27.84% / 27.84% Low 67.209776
FTGC First Trust Global Tactical Commodity Strategy Fund 0.95% -- -- -- 20.00% / 39.60% Low 72.01386
DWAC Elkhorn Commodity Rotation Strategy ETF 0.99% -- -- -- 20.00% / 39.60% Low 0
GCC WisdomTree Continuous Commodity Index Fund 0.69% -1.20% -0.93% -1.46% 27.84% / 27.84% Low 83.968253
RCOM Elkhorn Fundamental Commodity Strategy ETF 0.75% -- -- -- 20.00% / 39.60% Low 0
GSC GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN 1.25% -1.49% -0.59% -2.07% 20.00% / 39.60% Low 51.204719
BCM iPath Pure Beta Broad Commodity ETN 0.70% -0.63% -0.52% -0.78% 20.00% / 39.60% Low 82.913701
GSG iShares S&P GSCI Commodity Indexed Trust 0.48% -0.81% -0.31% -2.20% 27.84% / 27.84% Low 68.056718
CMDT iShares Commodity Optimized Trust 0.48% -0.94% -0.51% -1.56% 27.84% / 27.84% Medium 74.041084
GSP iPath S&P GSCI Total Return Index ETN 0.75% -3.25% 6.13% -5.19% 20.00% / 39.60% Medium 59.224887
PDBC PowerShares Optimum Yield Diversified Commodity Strategy No K-1 Portfolio 0.60% -- -- -- 20.00% / 39.60% Low 78.535327
CSCR Credit Suisse X-Links Commodity Rotation ETN 0.85% -0.80% -0.54% -0.96% 20.00% / 39.60% High 62.754842
RJI Elements Rogers International Commodity Index-Total Return ETN 0.75% 0.01% 1.13% -1.83% 20.00% / 39.60% Low 56.810792
DBC PowerShares DB Commodity Index Tracking Fund 0.65% -1.30% -0.75% -2.46% 27.84% / 27.84% Low 62.742992
SBV iPath Pure Beta S&P GSCI-Weighted ETN 0.85% -0.54% -0.45% -0.76% 20.00% / 39.60% High 73.118432
DJCI ETRACS Bloomberg Commodity Index Total Return ETN 0.50% -0.75% 0.66% -1.43% 20.00% / 39.60% Low 83.090478
DPU DB Commodity Long ETN -0.72% -0.44% -1.14% 20.00% / 39.60% High 66.14409643339
CSCB Credit Suisse X-Links Commodity Benchmark ETN -0.48% -0.40% -0.67% 20.00% / 39.60% Closing 75.505219103754

ETF.com Tradability Insight

There are two highly liquid funds in the broad basket commodities segment; DBC and DJP. DBC is by far the most frequently traded, with over $40M changing hands on a typical day, while DJPDBC is by far the most frequently traded sees about half that. That's enough volume to accommodate multiple creations and redemptions daily for both funds. The two funds also see the segment's narrowest average trading spreads.
Moving down the rankings, you will find multiple funds with more than enough volume for most retail traders, and average spreads that are a notch wider than the two segment leaders but still very workable. USCI in particular stands out for its tight spreads and strong volume.
Be careful trading funds with less than about $1M changing hands daily. The spread figures here are only the average inside spread, and the low volume of these funds implies that even modestly sized trades could blow open the order book. Near the bottom of the list are several highly illiquid funds that often go days or weeks with no trades at all.
Lastly, beware of DPU. It's been closed to creations since 2012 and is extremely illiquid, leading it to trade at very wide premiums and discounts against its NAV. The fund is effectively untradeable at all sizes. (Insight updated 02/27/17)

All Funds (21)

99
99.28093
98
98.380198
97
97.32892
97
97.11355
97
96.796865
95
94.80524
90
89.650436
82
82.289765
66
65.642352
65
64.74799
61
60.933132
59
59.1424
58
57.750497
55
55.253978
45
45.018311
38
37.51952
N/A
0
N/A
0
N/A
0
30
30
37
37.3421488

ETF.com Grade as 02/23/17

Commodities: Broad Market

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
GSG iShares S&P GSCI Commodity Indexed Trust $3.02 M 0.11% 3.87 100.00% -- 0% None 97.32892
GSP iPath S&P GSCI Total Return Index ETN $69.35 K 0.26% 0.16 100.00% -- 0% None 65.642352
PDBC PowerShares Optimum Yield Diversified Commodity Strategy No K-1 Portfolio $5.13 M 0.09% 3.00 100.00% -- 0.03% None 97.11355
RJI Elements Rogers International Commodity Index-Total Return ETN $811.24 K 0.34% 0.31 100.00% -- 0% None 82.289765
SBV iPath Pure Beta S&P GSCI-Weighted ETN $0 0.38% 0.00 100.00% -- 0% None 59.1424
BCM iPath Pure Beta Broad Commodity ETN $80.54 K 0.27% 0.06 100.00% -- 0% None 64.74799
UCI ETRACS UBS Bloomberg Constant Maturity Commodity Index TR ETN $286.83 K 0.49% 0.39 100.00% -- 0% Potential 57.750497
CMDT iShares Commodity Optimized Trust $59.85 K 0.53% 0.03 100.00% -- 0.06% None 55.253978
UCIB ETRACS CMCI Total Return ETN Series B $0 0.82% 0.00 100.00% -- -- None 0
USCI United States Commodity Index Fund $2.74 M 0.12% 1.36 100.00% -- 0.02% None 96.796865
CSCR Credit Suisse X-Links Commodity Rotation ETN $0 1.40% 0.01 100.00% -- 0.13% None 37.51952
DWAC Elkhorn Commodity Rotation Strategy ETF $71.86 K 0.57% 0.06 -- -- 0.04% None 0
DBC PowerShares DB Commodity Index Tracking Fund $34.6 M 0.06% 10.83 100.00% -- 0.02% None 98.380198
RCOM Elkhorn Fundamental Commodity Strategy ETF $20.58 K 0.73% 0.00 -- -- 0.01% None 0
DJCI ETRACS Bloomberg Commodity Index Total Return ETN $64.81 K 0.30% 0.08 100.00% -- 0% Potential 60.933132
DJP iPath Bloomberg Commodity Index Total Return ETN $5.91 M 0.04% 7.98 100.00% -- 0% None 99.28093
FTGC First Trust Global Tactical Commodity Strategy Fund $1.39 M 0.17% 1.34 100.00% -- 0.05% None 94.80524
GCC WisdomTree Continuous Commodity Index Fund $862.72 K 0.22% 0.87 100.00% -- 0.02% None 89.650436
GSC GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN $11.93 K 0.79% 0.01 100.00% -- 0% Potential 45.018311
DPU DB Commodity Long ETN $0 0 100.00% -- 0.31% Full 30
CSCB Credit Suisse X-Links Commodity Benchmark ETN $0 0 100.00% -- 0.13% None 37.3421488

ETF.com/ Block Liquidity

BCM
5
4
3
2
1
CMDT
5
4
3
2
1
CSCR
5
4
3
2
1
DBC
5
4
3
2
1
DJP
5
4
3
2
1
FTGC
5
4
3
2
1
GCC
5
4
3
2
1
GSG
5
4
3
2
1
GSP
5
4
3
2
1
PDBC
5
4
3
2
1
RJI
5
4
3
2
1
SBV
5
4
3
2
1
UCIB
5
4
3
2
1
USCI
5
4
3
2
1
DJCI
5
4
3
2
1
GSC
5
4
3
2
1
UCI
5
4
3
2
1
DWAC
5
4
3
2
1
RCOM
5
4
3
2
1
DPU
5
4
3
2
1
CSCB
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

The broad commodity baskets differ greatly from each other. The commodities space is a difficult one to index, and each index provider approaches it in a different way. For example, theThe commodities space is difficult to index most commonly cited index, the S&P GSCI, is a production-weighted index of 24 commodities. It heavily weights energy, and crude oil in particular. In contrast, the Dow Jones-UBS Commodity Index caps individual commodities and commodity sector weights to produce a more balanced portfolio, and there are a dozen variations in between. Since the indexes pick commodities and determine commodity weights differently, it's no surprise that the resulting portfolios are enormously different.
The range of funds is plain to see, even just looking at the sector allocations. GSC, GSG, GSP and SBV—which track versions of the GSCI—allocate about 72% of their portfolios to energy, leaving about 18% for agriculture and livestock, and about 10% for the various metals.
At the other end of the spectrum, GCC equally weights its 17 commodities, resulting in an energy allocation of just 18% and an agriculture allocation of nearly 60%. USCI also equally weights its commodities—which it selects dynamically based on momentum and term structure—and allocates 21% to energy and 64% to the ags, as of this writing.
In between are the products that track versions of the Dow Jones-UBS index—DJP, and DJCI—with about 30% in energy, 15-30% in agriculture and 20-30% in metals. BCM, UCI, RGRC and RJI also hold reasonably balanced portfolios, with 35-45% in energy each. The last products—DBC, DPU, CSCB and CSCR—have much higher allocations to energy (about 50-60% each), but are still more balanced than the GSCI-based products.
Although all of the broad commodities baskets use futures contracts for their exposure, they pick them in different ways. DJCI, DJP, GSG, GSP and RJI hold the front-month (or nearest-to-expire) contracts on each of their commodities, while the other products dynamically pick contracts to try to dampen contango. The choice of contract can sometimes have as big of an impact on performance as the choice of commodity, so neither can be safely ignored in your quest for the right commodities fund.
Ultimately, investors will need to look carefully at each commodity basket to find the one that comes closest to their needs, while ensuring that the methodology for picking and rolling futures contracts is also in line with expectations. (Insight updated 02/27/17)

All Funds (21)

91
91
88
88
62
62
5
5
48
48
28
28
26
26
24
24
18
18
16
16
11
11
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
62
62
32
32

ETF.com Grade as 02/23/17

Commodities: Broad Market