Top Performing Commodity ETFs Year-To-Date

July 03, 2014

Many commodities have outperformed stocks this year.

In contrast to last year, 2014 is shaping up to be a positive year for commodities. Thus, the threshold was quite high to make this top-seven list for performance during the first half of the year. Each of the seven commodity exchange-traded products on this list climbed more than 10 percent over the past six months, outperforming the S&P 500's 6.2 percent gain.

7. United States Oil Fund (USO | A-100) +10.1%               

USO was the only energy funds out of a broad energy ETF segment to make the top performers list in the first half of the year. Prices for WTI crude oil have rallied this year on the back of the startup of a number of new pipelines, which have alleviated the regional glut of oil in the U.S. Midwest, and helped narrow WTI's discount to other crude oil benchmarks.

The recent conflict in Iraq also gave prices a boost. Notably, with its 10.1 percent year-to-date gain, USO has done better than the 7.1 percent increase in front-month WTI futures contracts. Because futures have been in backwardation—when the nearby expiring contract is the most expensive on the curve—investors have enjoyed a positive roll yield that has added to their returns.


6. SPDR Gold Trust (GLD | A-100) +10.3%

One of the worst-performing ETFs of 2013, with a 28 percent loss, GLD has attempted to make a comeback this year. Anticipation of the "tapering" of the Federal Reserve's quantitative easing program weighed on prices last year, but now that the Fed is actually tapering, the gold market is rallying in a classic "sell the rumor, buy the news" type of move.



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