Top Performing Commodity ETFs

October 18, 2018

Stock and bond markets may be getting all the attention, but another asset class has been quietly making moves of its own. Led by strong prices for energy, commodities recently reached their highest level in four years, adding to a steady rally that began in early 2016.

The S&P GSCI Total Return Index, one of the most recognizable commodity indices, gained 11.7% in the year-to-date period through Oct. 16. ETFs tracking the index, and others like it, have followed suit to the upside.

High-Flying Oil ETFs

Of course, some commodity ETFs focused on specific commodities are up much more than those broad ETFs. Take the United States 3x Oil Fund (USOU). It aims to deliver three times the daily returns of oil futures, a strategy that’s returned a whopping 75.2% this year.

Even without the benefit of leverage, oil ETFs, such as the United States Oil Fund LP (USO) and the Invesco DB Oil Fund (DBO), managed to hand out robust returns—over 26%—for investors who were lucky enough to bet on rising crude prices at the start of the year.

Strong global oil demand, which topped 100 million barrels per day for the first time ever this year, combined with tumbling oil exports from two major producers, pushed crude prices to a four-year high this year.

Venezuelan oil production hit the lowest level in 15 years amid an economic crisis in that country, while Iranian oil exports dropped to a 2 ½-year low ahead of the implementation of U.S. sanctions intended to punish the Iranian oil industry.

 

Top-Performing Commodity ETFs Of 2018

Ticker Fund YTD Return (%)
USOU  United States 3x Oil Fund 75.16
BOM DB Base Metals Double Short ETN 70.26
UWT  VelocityShares 3x Long Crude Oil ETN 67.93
WTIU  UBS ETRACS - ProShares Daily 3x Long Crude ETN 65.59
OILU  ProShares UltraPro 3x Crude Oil ETF 63.90
UCO  ProShares Ultra Bloomberg Crude Oil 46.54
DSLV VelocityShares 3X Inverse Silver ETN 42.42
OLO  DB Crude Oil Long ETN 32.35
ZSL  ProShares UltraShort Silver 31.78
DBO  Invesco DB Oil Fund 31.03
USL  United States 12 Month Oil Fund LP 28.54
BNO  United States Brent Oil Fund LP 26.52
USO  United States Oil Fund LP 26.48
OILB  iPath Series B S&P GSCI Crude Oil ETN 25.84
OILK  ProShares K-1 Free Crude Oil Strategy ETF 25.02

Note: Data measures total returns for the year-to-date period through 10/16/2018.

 

Betting Against Metals Pays Off

Along with ETFs that bet on crude oil, products that bet against metals have also performed well this year. The VelocityShares 3X Inverse Silver ETN (DSLV) and the ProShares UltraShort Silver (ZSL) are two such examples.

Gold and silver prices dropped 6.2% and 13.7%, respectively, this year. Products that rise when precious metals prices fall—especially those that use leverage—were prime beneficiaries of the gold and silver swoon.

DSLV added a cool 42.4% year-to-date, while ZSL gained 31.8% in the same period.

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