Commodity ETFs YTD: Solar Funds Shine

September 27, 2013

The best-performing broad market fund is indicative of that; the Market Vectors RVE Hard Assets Producers (HAP | B-88) has risen only 2.11 percent in 2013, while the worst broad market fund, EGShares’ Emerging Markets Metals & Mining fund (EMT | F-49), has fallen 28.38 percent year-to-date.

Broad Market Best Worst

Broad market ETPs can be tricky to measure against each other, and our top and bottom performers here are excellent examples of that. EMT is technically a multicommodity fund because it holds precious and industrial metals securities, as well as coal. However, its holdings are heavily tilted toward steel—nearly 40 percent—and it has a generous 16.7 percent allocation to coal.

HAP, on the other hand, holds a truly diverse basket of commodity securities, allocating 33 percent to oil and gas; 21 percent to metals and mining; 15 percent to chemicals; 9 percent to food and tobacco, among a slew of other allocations.

A heavy allocation toward energy ratcheted HAP to the top of the broad market performance charts, and brings up the next sector to review: energy.

Tensions in the Middle East pushed prices up, especially in the summer months, when travel in the U.S. is at a peak and recreational use of oil increases demand. With the driving season now at an end, and with easing of the Middle East tensions, it’s possible we’ll see a retreat from the steep climb of energy ETPs.

But oil ETFs were not the best performers in the sector, as clean-energy ETFs outperformed. The Guggenheim Solar ETF (TAN | B-35) is up 98.38 percent since the beginning of the year, making it not only the best-performing commodity ETF so far this year, it’s the best-performing ETF period.

Even the “bad” energy ETP performances aren’t too steep year-to-date. The WisdomTree Global Natural Resources fund (GNAT | C-57) fell by just under 9 percent this year, and GNAT’s 33.6 percent allocation to metals and mining likely had a lot to do with the fund’s poor performance.

Energy Best Worst

 

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