Best & Worst Performing Commodity ETFs

December 16, 2019

In a year in which financial assets across the board have surged, commodities haven’t been left out.

The asset class is on track to finish 2019 with double-digit percentage gains, the best showing since 2016. One widely followed marker of commodity returns, the S&P GSCI Spot Index, is up 12.3% year to date, clawing back some of 2018’s 15.4% loss.

To be sure, commodities aren’t suddenly roaring back to life. Based on the spot index, the asset class is still down 7.5% over the past five years; 14% over the past 10 years; and a whopping 53% since its peak in July 2008.

Meanwhile, the S&P GSCI Total Return Index, which measures the actual experience of holding commodity futures and rolling them over one month to the next, has delivered even worse returns: a loss of 29% over the past five years; a loss of 41% over the past 10 years; and a 77% loss since the 2008 peak.

Clearly, commodities are still very much depressed relative to where they were a decade ago, but there are some notable bright spots within the group. Certain individual commodities and commodity ETFs have strongly outpaced even equities this year, and those are the ones we’ll be taking a look at below.

 

Best-Performing Commodity ETFs Of The Year (excluding leveraged/inverse)

Ticker Fund YTD Returns (%)
PALL Aberdeen Standard Physical Palladium Shares ETF 51.62%
UGA United States Gasoline Fund LP 36.19%
JJN iPath Series B Bloomberg Nickel Subindex Total Return ETN 30.88%
BNO United States Brent Oil Fund LP 29.94%
USO United States Oil Fund LP 27.33%
USOI Credit Suisse X-Links Crude Oil Shares Covered Call ETN 27.09%
OIL iPath Series B S&P GSCI Crude Oil ETN 27.06%
OILX ETRACS S&P GSCI Crude Oil Total Return ETN 26.99%
OLEM iPath Pure Beta Crude Oil ETN 26.00%
OILK ProShares K-1 Free Crude Oil Strategy ETF 25.33%
USL United States 12 Month Oil Fund LP 23.50%
DBO Invesco DB Oil Fund 22.79%
AOIL Aberdeen Standard Bloomberg WTI Crude Oil Strategy K-1 Free ETF 20.55%
GSC GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN 19.51%
PLTM GraniteShares Platinum Trust 17.98%
PPLT Aberdeen Standard Physical Platinum Shares ETF 17.81%
RJN Elements Rogers International Commodity Index-Energy TR ETN 17.48%
PGM iPath Series B Bloomberg Platinum Subindex Total Return ETN 17.44%
GLTR Aberdeen Standard Physical Precious Metals Basket Shares ETF 17.07%
JO iPath Series B Bloomberg Coffee Subindex Total Return ETN 16.56%

Data measures total returns for the year-to-date period through Dec. 11.
 

Undisputed No. 1

The undisputed leader in the commodity space this year has been palladium. The Aberdeen Standard Physical Palladium Shares ETF (PALL), with more than $300 million in assets under management, surged 51.6% this year as palladium prices hit record highs above $1,940/oz.

Incredibly, palladium prices are not only trading at a 33% premium to current gold prices, they are also trading above the all-time high for gold, which was $1,921, set in 2011.

Palladium demand is on track to outpace palladium supply for the eighth year in a row, according to Johnson Matthey . The metal is coveted for its role as an autocatalyst, which reduces vehicle pollution and is often mandated by governments.

The Oil Complex Rebounds

The next-best-performing commodity ETFs this year behind palladium target the oil complex. The United States Gasoline Fund LP (UGA), the United States Brent Oil Fund LP (BNO) and the United States Oil Fund LP (USO) have gained 27-36% this year.

Let’s be clear. Oil is in no way, shape or form in a bull market. Current prices in the $60 range are well off 2018’s high of around $80. That’s even with the 1.2 million barrels per day of OPEC production cuts that are in effect.

U.S. crude oil production, which is up more than 1 million barrels per day this year, has simply been too much of a head wind for prices. Still, anyone who bought oil-tracking ETFs after the sell-off at the end of last year is sitting with respectable gains.

Gold Breaks Out

The aforementioned palladium isn’t the only precious metal rallying this year. Fellow autocatalyst platinum has also risen, though by much less. The GraniteShares Platinum Trust (PLTM), with $116 in AUM, gained 18% on a year-to-date basis, a decent return. But bigger picture, platinum prices are still relatively depressed, trading at half the levels of palladium as supply outstrips demand by a wide margin.

Meanwhile, the most prominent precious metal of all—gold—made some moves of its own in 2019. The GraniteShares Gold Trust (BAR), the SPDR Gold MiniShares Trust (GLDM) and the SPDR Gold Trust (GLD) each gained more than 14.5%.

While still well off their record highs, gold prices decisively broke out this year, briefly topping the $1,550 level for the first time in six years. Prices are about $100 off those levels currently, but the yellow metal remains in demand as investors look for alternatives to safe-haven government bonds, many of which are yielding close to nothing.

Other Winners

Other notable ETFs tracking individual commodities to do well this year include the iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN), up 30.9%; the iPath Series B Bloomberg Coffee Subindex Total Return ETN (JO), up 16.7%; and the Aberdeen Standard Physical Silver Shares ETF (SIVR), up 8.7%.

In addition to the single-commodity ETFs mentioned, a handful of broad commodity index ETFs are also among the best performers this year. The GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN (GSC), the iPath S&P GSCI Total Return Index ETN (GSP) and the iShares S&P GSCI Commodity Indexed Trust (GSG) are each up double-digit percentages in 2019.

Worst-Performers

Taking a quick look at the worst-performing commodity ETFs of the year, we find a trio of natural gas products headlining. The iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ), the United States Natural Gas Fund LP (UNG) and the United States 12 Month Natural Gas Fund LP (UNL) shed 19-37% this year.

Supplies of natural gas are bursting at the seams as the U.S. produces record amounts of the fuel. Natural gas is primarily used for heating and electricity generation. But even though demand for the fuel has risen solidly in recent years, it hasn’t been enough to absorb the enormous amounts of supply.

In addition to natural gas, several agricultural commodities have also fared poorly this year, no doubt weighed down by the U.S.-China trade war.

The Teucrium Corn Fund (CORN), the iPath Series B Bloomberg Cotton Subindex Total Return ETN (BAL), the iPath Series B Bloomberg Livestock Subindex Total Return ETN (COW) and the Teucrium Wheat Fund (WEAT) lost 8-11% so far this year.

For a full list of the worst performers, see the table below:

 

Worst-Performing Commodity ETFs Of The Year (ex. leveraged/inverse)

Ticker Fund YTD Returns (%)
GAZ iPath Series B Bloomberg Natural Gas Subindex Total Return ETN -37.02%
UNG United States Natural Gas Fund LP -30.31%
UNL United States 12 Month Natural Gas Fund LP -19.07%
CORN Teucrium Corn Fund -11.28%
BAL iPath Series B Bloomberg Cotton Subindex Total Return ETN -11.05%
JJT iPath Series B Bloomberg Tin Subindex Total Return ETN -9.28%
GRU Elements MLCX Grains Index-Total Return ETN -8.59%
COW iPath Series B Bloomberg Livestock Subindex Total Return ETN -8.16%
WEAT Teucrium Wheat Fund -8.09%
TAGS Teucrium Agricultural Fund -7.92%
FUE Elements MLCX Biofuels Index-Total Return ETN -7.89%
JJG iPath Series B Bloomberg Grains Subindex Total Return ETN -7.14%
JJU iPath Series B Bloomberg Aluminum Subindex Total Return ETN -6.78%
SOYB Teucrium Soybean Fund -6.43%
RJA Elements Rogers International Commodity Index-Agriculture TR ETN -4.64%
FUD ETRACS UBS Bloomberg CMCI Food Total Return ETN -4.60%
SDCI USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund -4.58%
USCI United States Commodity Index Fund -4.45%
UAG ETRACS UBS Bloomberg CMCI Agriculture Total Return ETN -3.71%
DBA Invesco DB Agriculture Fund -3.01%

Data measures total returns for the year-to-date period through Dec. 11.

Email Sumit Roy at [email protected] or follow him on Twitter sumitroy2

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