Meanwhile, the WisdomTree Continuous Commodity ETF (GCC | C-5) tracks the Thomson Reuters Equal Weight Continuous Commodity Index. GCC equal-weights 17 commodities and uses futures contracts averaged across the nearest six months of the futures curve to maintain its exposure.
Another ETF with an equal-weighting scheme is the United States Commodity ETF (USCI | D-11). Unlike GCC, USCI's basket of commodities isn't static. Each month, it picks the seven commodities with the greatest backwardation (or least contango) and the seven commodities with the greatest 12-month price momentum and equal weights them.
Another product with a similar strategy but with little in the way of assets is the Credit Suisse X-Links Commodity Rotations ETN (CSCR | F-16), which equal-weights eight commodities with the most backwardation.
For those who believe commodity picking is a viable strategy, two actively managed ETFs are available in the space. The First Trust Global Tactical Commodity Strategy Fund (FTGC | C) is one such active fund. Currently, FTGC is heavy on agriculture.
Another option in the active space is the PowerShares DB Optimum Yield Diversified Commodity Strategy (PDBC | F). Using active management, PDBC aims to outperform its sister fund, the PowerShares DB Commodity Tracking ETF (DBC | D-26).
DBC is the most popular ETF in the broad commodity segment, with $1.9 billion in assets, and tracks the DBIQ Optimum Yield Diversified Commodity Index. DBC holds a capped, production-weighted basket of 14 commodities, while employing contango-mitigation techniques.
Finally, there are two funds that provide broader exposure to the asset class. The Elements Rogers International Commodity Total Return ETN (RJI | C-28) holds commodities as diverse as orange juice, milk, and rapeseed. The constituents of the underlying index are chosen by a committee of "wise people" and is based on world consumption patterns and liquidity.
Meanwhile, the Etracs CMCI Total Return ETN (UCI | C) tracks an index of 28 commodities weighted based on "economic importance."
RJI uses front-month futures for its exposure, while UCI uses five different futures contracts per commodity in an effort to reduce contango.
Note: Returns based on year-to-date change in NAVs.
Contact Sumit Roy at [email protected].