Top Performing Commodity ETFs

October 18, 2018

Stripping Out Oil

The list of top-performing commodity ETFs is filled to the brim with oil products and the occasional inverse gold or silver product. That’s important to know—when it comes to commodities, 2018 is undoubtedly the year of oil.

But stripping those inverse, leveraged and oil products out of the list can help us spot under-the-radar funds that are also climbing and could continue to climb if the commodities recovery continues.

 

Top-Performing Commodity ETFs Of 2018 (excluding leveraged/inverse/oil)

Ticker Fund YTD Return (%)
RJN  Elements Rogers International Commodity Index-Energy TR ETN 23.81
DBE  Invesco DB Energy Fund 22.78
BEF  Aberdeen Standard Bloomberg Energy Commodity Longer Dated Strategy K-1 Free ETF 17.73
UNG  United States Natural Gas Fund LP 14.92
JJEB  iPath Series B Bloomberg Energy Subindex Total Return ETN 13.65
GSP  iPath S&P GSCI Total Return Index ETN 13.38
NIB  iPath Bloomberg Cocoa Subindex Total Return ETN 12.54
GSG  iShares S&P GSCI Commodity Indexed Trust 11.06
COMG  GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF 11.01
DBC  Invesco DB Commodity Index Tracking Fund 8.43
GSC  GS Connect S&P GSCI Enhanced Commodity TR Strategy ETN 8.42
UNL  United States 12 Month Natural Gas Fund LP 8.17
PDBC  Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF 7.91
UGA  United States Gasoline Fund LP 7.46
GAZB  iPath Series B Bloomberg Natural Gas Subindex Total Return ETN 7.02

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

 

This narrower list is still topped by energy-related ETFs, like the Elements Rogers International Commodity Index-Energy TR ETN (RJN) and the Invesco DB Energy Fund (DBE).

Oil’s ascent has clearly bolstered the 22%-plus returns for these products. But so too has the increase in natural gas prices.

Prices for the fuel are up 10.6% this year on the back of low storage levels and a cold start to the winter heating season. According to the Energy Information Administration, stockpiles of natural gas are 17% below the five-year average, and could fall into a bigger hole if the colder-than-normal temperatures currently hitting the U.S. East Coast and Midwest persist.

One of the largest ETFs to exclusively track natural gas, the United States Natural Gas Fund LP (UNG), is up 14.9% year-to-date, outperforming natural gas futures.

Cocoa Rebounds

Outside of the energy commodities, cocoa is another outperformer. The iPath Bloomberg Cocoa Subindex Total Return ETN (NIB) advanced 12.5% year-to-date, a tad below the 16% increase in cocoa futures prices.

The cocoa bounce comes from low levels. Last year, cocoa dipped to 10-year lows amid a surplus of crops. This year, the market is seen as more balanced, leading to a slight rebound for the bean.

Broad Commodity ETF Winners

Individual commodity ETFs aren’t the only ones to rally in 2018. Several broad commodity products—those that offer exposure to all segments of the commodity market, from energy to metals to agriculture—also generated handsome returns so far this year.

The broad products that target the S&P GSCI, or a similar version of the index, have done the best as their heavy weighting in energy has paid off.

For example, the iPath S&P GSCI Total Return Index ETN (GSP) and the iShares S&P GSCI Commodity Indexed Trust (GSG) returned 13.4% and 11.1%, respectively.

The popular Invesco DB Commodity Index Tracking Fund (DBC) and the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)—the latter of which has seen inflows of a whopping $1.7 billion this year—are also among the top performers of 2018.

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

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