The Best Commodity ETFs

Commodity ETFs hold assets in companies that source and transport agricultural products, natural resources and precious metals. ETFs from this sector can also consist of futures and derivatives that track the price of underlying commodities. These commodities can include cash crops, natural resources and precious metals. 

Investing directly in commodities like raw materials or cash crops can require extensive research and personal connections with distributors. A direct investment can be tough to manage, but you can put money into a bundle of these commodities with commodity exchange-traded funds (ETFs). 

Quick Look at the Best Commodity ETFs:

• ProShares Ultra Bloomberg Natural Gas
• United States Natural Gas Fund LP
• Teucrium Wheat Fund

Biggest Gainers and Losers

Stay on top of the latest commodity ETFs on the stock market with the most profits and losses. 

Premarket Commodity ETFs

Take a look at the stock quotes of these ETFs before the trading session opens on the stock exchange.

Aftermarket Commodity ETFs

Here’s a glance at the price movements of commodity ETFs after trading sessions are closed on the stock exchange. 

Why Invest in Commodity ETFs?

Here are 3 reasons you should consider investing in these ETFs. 

1. Commodity ETFs can help diversify your portfolio. 

Commodity ETFs fund a wide range of industries such as metals, livestock, agricultural produce and natural resources. Some of these ETFs focus on a single commodity while others offer broader exposure to numerous commodities.

You can also choose to invest in ETFs with these underlying commodities such as oil, gold and water. You can also put your money behind commodity stock ETFs that hold assets in companies that produce and distribute commodities. 

There are more than 100 ETFs from the commodities sector. Each ETF has a varying volatility rate to suit your risk profile and portfolio.  

2. Commodity ETF performances are inversely related to stocks. 

Commodities can rise in value when stocks crash and vice versa. Market downward spirals have driven high demand for assets such as gold and oil, and investors were met with limited trading capacity. But commodity ETFs can make it easier to buy and sell assets at the click of a button. 

Stock markets took a severe hit during the 1st quarter of 2020. But during this time, the World Gold Council reported gold-backed ETFs added 298 tons of gold or $23 billion worth of assets  — the highest quarterly amount and the largest tonnage added since 2016.

3. Commodity ETFs can be leveraged for greater returns. 

Leveraged commodity ETFs are designed to track benchmark indices with a double or even triple rate of return. These ETFs can come in handy to make quick profits during economic crises. But you should only invest in these leveraged ETFs if you have a high-risk profile.

There are management fees and interest rates involved in leveraged commodity ETFs that could have a compound effect on your returns from long-term investments. The leverage rates are reset on a daily basis. You can often make most of your gains off of these ETFs in a 1-day trading session. 

Top 3 Commodity ETFs by AUM

ETFs with underlying commodities are volatile and can vary in stock value throughout the year. The price of agricultural commodities depends on harvest conditions. Oil and natural gas commodities are inclined toward the trade policies between countries and metal commodities are subject to availability. 

You should consider the expense ratios, stock quotes, index performance, historical returns record, liquidity and total assets under management (AUM) before investing in ETFs. 

Here are some of the top ETFs by AUM based on these criteria.  

ProShares Ultra Bloomberg Natural Gas

ProShares Ultra Bloomberg Natural Gas (NYSEARCA: BOIL) seeks daily investment results that correspond to twice the daily performance of the Bloomberg Natural Gas Subindex. The fund’s benchmark is an index of natural gas futures contracts. It is not intended to track the performance of the spot price of natural gas. It should be expected to perform very differently from the spot price of natural gas, according to ProShares.

United States Natural Gas Fund LP

United States Natural Gas Fund LP (NYSEARCA: UNG) is an exchange-traded security that is designed to track the movements of natural gas prices. It's a commodity pool and invests in futures contracts set to expire within the next month. The fund is a great option if you prefer a short-term strategy and an inflation hedge.

Teucrium Wheat Fund

Teucrium Wheat Fund ETF (NYSEARCA: WEAT) reflects the daily changes in percentage terms of a weighted average of the closing settlement prices for futures contracts for wheat traded on the Chicago Board of Trade.

Best Online Brokers for Commodity ETFs

Find and invest in the top ETFs with an online broker. You can trade ETFs commission-free through most online brokerages. Benzinga has put together our picks for some of the best online brokers to get you started.

1. TradeStation

Unlock your investing potential with advanced trading tools on TradeStation. You can open a TS SELECT account with a $2,000 minimum deposit or a TS GO account with a $0 minimum deposit. 

TradeStation allows trade on desktop, web and mobile applications. You can get in touch with TradeStation’s customer support by phone, email, live chat or chatbot. The website also gives you access to tons of educational resources. 

2. Firstrade

Firstrade is an online broker with a full suite of financial products such as stocks, ETFs, options, fixed income and mutual funds. You can open an account for free. 

Firstrade is fully-customizable and you can manage your account and trade from your desktop, iPad and smartphone. It features a QuickBar tool that gives you the fastest and simplest ways to trade without shifting between screens for research. 

3. Magnifi

Magnifi is a marketplace that allows you, as the investor, to use common brokerage tools and AI to make the best decisions for your portfolio. Because you can pull up all the information you need on a given asset, you can easily invest in the assets that will give you the results you deserve and better match your strategy.

Search for the investment options that meet your needs, invest in specific categories or scan for assets in a price range that’s affordable for you.

Best for long-term investors and those who require a bit of client support, you can also learn more about investing from this platform, utilize the AI-powered investing assistant, enjoy commission-free investing, try the mobile app and take advantage of over 15,000 possible investment options. This makes Magnifi a good place to trade for both seasoned and novice traders.

4. TD Ameritrade

TD Ameritrade is an industry-leading online broker with more than 40 years of expertise. It has pioneered a number of trading technologies to make investing more efficient. There is no minimum amount required to open an account. 

TD Ameritrade lets you take advantage of 3rd-party research and planning tools to improve your trading tactics. It also features a live Twitter feed on the platform to keep you updated on the latest financial buzz.     

5. Pepperstone

Pepperstone offers competitive spreads and a reliable trading platform that comes with strong regulation and a simple trading experience. You can use the platform for algo trading, API trading, to access AutoChartist and get the best customer service possible. Yes, slippage can occur, but the platform is well-respected and offer:

• $0 Minimum deposit
• Over 60 currency pairs
• Access to MT4, MT5, cTrader, Web Trading Platforms and Mobile App
• 30:1 leverage for retail clients and up to 500:1 for professional clients

Curated Commodities for Trade

These ETFs can expose you to a spectrum of penny stocks and small, mid and large-cap companies to expand your stock portfolio. With a little experience under your belt, you can gain an edge during complex stock market conditions by trading shares of commodity ETFs.