Worst 10 Commodity ETFs Of 2015

July 09, 2015

While gasoline, cocoa, cotton and a few other commodities performed relatively well during the first half of the year, for the most part, the asset class continued to struggle. Indeed, while it only took a gain of 1.6 percent to make the top 10 performers list for commodity ETFs, it took a decline of nearly 16 percent to make this worst performers list.


All of the ETFs on this list are single-commodity products, with metals and soft commodities taking up nine of the 10 spots. Returns are as of June 30.


10. ETFS Physical Palladium (PALL | A-100) -15.92 percent

One of the best-performing commodities last year, palladium, has taken it on the chin so far this year. A swift recovery in South African supplies following the crippling strikes of 2014 left many traders surprised.


Johnson Matthey anticipates that the country's output will rebound 17 percent to a four-year high this year, narrowing the supply and demand deficit to a mere 100,000 ounces, a sharp decline from 1.8 million ounces last year.


The only pure-play palladium ETF on the market, PALL followed palladium spot prices tick-for-tick lower. However, the fund still boasts a respectable asset base of $306 million.


9. iPath Bloomberg Sugar Subindex Total Return ETN (SGG | C-90) -17.42 percent

With supply on track to outpace demand for a fifth-straight year, sugar plunged to a six-year low, fueling losses in the three ETFs that track the commodity. The USDA anticipates that global stockpiles of sugar will hit record highs this season, with no end in sight to the glut.


Weakness in the real—the currency of No. 1 producer Brazil—has bolstered farmers' earnings despite the decline in prices. The real has lost nearly a third of its value against the U.S. dollar in the past year, and more than half its value since 2011, making Brazilian producers more competitive.


Of the three sugar ETFs that are out there, SGG was the "least bad" of the bunch. The ETN employs a basic front-month rolling strategy and is the largest of the trio, with $58 million in AUM.


8. Teucrium Sugar (CANE | F) -20.12 percent

Unlike SGG, CANE doesn't hold the front-month sugar contract at all, but instead holds a basket of three contracts: the second-to-expire contract; the third-to-expire contract; and the futures contract "expiring in the March following the expiration of the third-to-expire contract."


This laddered approach resulted in a modest underperformance against SGG during the first six months of the year. CANE is also a much smaller product, with only $4 million in assets under management.


Find your next ETF

Reset All