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Commodities have been performing remarkably well this year, with the Bloomberg Commodity Index, a widely viewed measure of broad commodities prices, rising to its highest level since November. Most of the rally were driven by higher prices for oil, gold, and cocoa.
While most commodity ETFs have been soaring, United States Oil Fund (USO - Free Report) , United States Brent Oil Fund (BNO - Free Report) , Invesco DB Agriculture Fund (DBA - Free Report) , United States Gasoline ETF (UGA - Free Report) and GraniteShares Gold Trust (BAR - Free Report) have been the show stealers so far this year.
Global oil prices have soared to the highest level in seven months, buoyed by the Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East that has threatened the oil supply. Brent oil rose above $89 per barrel for the first time since early September, while U.S. crude reached a five-month high of $85 per barrel. Brent and U.S. crude prices have risen 15% and 19%, respectively, since the start of the year. Gas prices have also started to climb up ahead of the summer driving season.
Precious metals like gold and silver took flight in March. The yellow metal logged its biggest monthly rise in more than three years in March, rising 8.5% on renewed expectations of U.S. interest rate cuts in June, strong safe-haven appeal and strong central bank buying (read: Should You Buy Gold ETFs Now?).
Meanwhile, silver prices climbed above the $25-an-ounce mark for the first time in 2024 on higher industrial and manufacturing demand. The global push for green energy, increasing demand in areas like 5G, a rebound in global computer shipments, the photovoltaics and automotive industries, and new sources of demand for sensors used in IoT and OLED lighting are propelling silver demand.
Industrial metals, such as copper and nickel, are seeing upticks in prices, buoyed by supply concerns and robust demand, driven by increased production of electric vehicles. Notably, copper prices soared to an 11-month high in March following an agreement by China-based smelters to cut production. These smelters are responsible for processing half of the global copper supply. The copper market is tightening, with China smelter maintenance set to peak in April and May, which could hurt refined copper production, thereby hiking the price (read: ETFs to Play the Potential Strength in Copper Prices).
Coming to agriculture commodities, cocoa prices nearly tripled in the first quarter to reach a level twice as high as the previous record set 50 years ago. The commodity skyrocketed to a new all-time high of more than $10,000 a ton from $3,000 a ton at the start of the year. A third consecutive year of supply shortages caused by poor harvests in West Africa led to the surge.
United States Oil Fund is the most popular ETF in the oil space, with an AUM of $1.4 billion and an average daily volume of 4 million shares. It seeks an average daily percentage change in USO’s net asset value for any period of 30 successive valuation days within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. United States Oil Fund has an expense ratio of 0.60% (read: 5 Top ETFs of the Best-Performing Sector of March).
United States Brent Oil Fund (BNO - Free Report) – Up 19.7%
United States Brent Oil Fund is designed to track the daily price movements of Brent crude oil. It provides exposure to the near-month futures contract traded on the ICE Futures Exchange. If the near-month futures contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. BNO invests primarily in listed crude oil futures contracts and other oil-related futures contracts, and may invest in forwards and swap contracts. United States Brent Oil Fund amassed $134.2 million in its asset base, and charges 1.00% as annual fees and expenses. Volume is good as it exchanges 600,000 shares a day on average.
Invesco DB Agriculture Fund (DBA - Free Report) – Up 19.4%
Invesco DB Agriculture Fund tracks the DBIQ Diversified Agriculture Index Excess Return, a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities. It has key holdings in cocoa, coffee and live cattle, with double-digit exposure each. Invesco DB Agriculture Fund charges 93 bps on an annual basis and trades in a volume of 406,000 shares a day. It has amassed $788.6 million in its asset base.
United States Gasoline ETF (UGA - Free Report) – Up 18.9%
United States Gasoline ETF is designed to track the movements of gasoline prices in percentage terms. The benchmark futures contract is the contract on gasoline as traded on the NYMEX. If the near-month contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. United States Gasoline ETF is illiquid, with a daily trading volume of about 28,000, suggesting that investors have to pay extra beyond the annual fee of 0.97% per year. The fund has managed assets of $120.3 million (read: Boost Profits With Gasoline ETF Ahead of Summer Driving Season).
GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account. It is among the lowest-cost gold ETFs on the market, having an expense ratio of 0.17%. GraniteShares Gold Trust has amassed $1 billion in its asset base while trading in an average daily volume of 663,000 shares.
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5 Commodity ETFs Riding High in 2024
Commodities have been performing remarkably well this year, with the Bloomberg Commodity Index, a widely viewed measure of broad commodities prices, rising to its highest level since November. Most of the rally were driven by higher prices for oil, gold, and cocoa.
While most commodity ETFs have been soaring, United States Oil Fund (USO - Free Report) , United States Brent Oil Fund (BNO - Free Report) , Invesco DB Agriculture Fund (DBA - Free Report) , United States Gasoline ETF (UGA - Free Report) and GraniteShares Gold Trust (BAR - Free Report) have been the show stealers so far this year.
Global oil prices have soared to the highest level in seven months, buoyed by the Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East that has threatened the oil supply. Brent oil rose above $89 per barrel for the first time since early September, while U.S. crude reached a five-month high of $85 per barrel. Brent and U.S. crude prices have risen 15% and 19%, respectively, since the start of the year. Gas prices have also started to climb up ahead of the summer driving season.
Precious metals like gold and silver took flight in March. The yellow metal logged its biggest monthly rise in more than three years in March, rising 8.5% on renewed expectations of U.S. interest rate cuts in June, strong safe-haven appeal and strong central bank buying (read: Should You Buy Gold ETFs Now?).
Meanwhile, silver prices climbed above the $25-an-ounce mark for the first time in 2024 on higher industrial and manufacturing demand. The global push for green energy, increasing demand in areas like 5G, a rebound in global computer shipments, the photovoltaics and automotive industries, and new sources of demand for sensors used in IoT and OLED lighting are propelling silver demand.
Industrial metals, such as copper and nickel, are seeing upticks in prices, buoyed by supply concerns and robust demand, driven by increased production of electric vehicles. Notably, copper prices soared to an 11-month high in March following an agreement by China-based smelters to cut production. These smelters are responsible for processing half of the global copper supply. The copper market is tightening, with China smelter maintenance set to peak in April and May, which could hurt refined copper production, thereby hiking the price (read: ETFs to Play the Potential Strength in Copper Prices).
Coming to agriculture commodities, cocoa prices nearly tripled in the first quarter to reach a level twice as high as the previous record set 50 years ago. The commodity skyrocketed to a new all-time high of more than $10,000 a ton from $3,000 a ton at the start of the year. A third consecutive year of supply shortages caused by poor harvests in West Africa led to the surge.
We have profiled the ETFs below:
United States Oil Fund (USO - Free Report) – Up 21.2%
United States Oil Fund is the most popular ETF in the oil space, with an AUM of $1.4 billion and an average daily volume of 4 million shares. It seeks an average daily percentage change in USO’s net asset value for any period of 30 successive valuation days within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. United States Oil Fund has an expense ratio of 0.60% (read: 5 Top ETFs of the Best-Performing Sector of March).
United States Brent Oil Fund (BNO - Free Report) – Up 19.7%
United States Brent Oil Fund is designed to track the daily price movements of Brent crude oil. It provides exposure to the near-month futures contract traded on the ICE Futures Exchange. If the near-month futures contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. BNO invests primarily in listed crude oil futures contracts and other oil-related futures contracts, and may invest in forwards and swap contracts. United States Brent Oil Fund amassed $134.2 million in its asset base, and charges 1.00% as annual fees and expenses. Volume is good as it exchanges 600,000 shares a day on average.
Invesco DB Agriculture Fund (DBA - Free Report) – Up 19.4%
Invesco DB Agriculture Fund tracks the DBIQ Diversified Agriculture Index Excess Return, a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities. It has key holdings in cocoa, coffee and live cattle, with double-digit exposure each. Invesco DB Agriculture Fund charges 93 bps on an annual basis and trades in a volume of 406,000 shares a day. It has amassed $788.6 million in its asset base.
United States Gasoline ETF (UGA - Free Report) – Up 18.9%
United States Gasoline ETF is designed to track the movements of gasoline prices in percentage terms. The benchmark futures contract is the contract on gasoline as traded on the NYMEX. If the near-month contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. United States Gasoline ETF is illiquid, with a daily trading volume of about 28,000, suggesting that investors have to pay extra beyond the annual fee of 0.97% per year. The fund has managed assets of $120.3 million (read: Boost Profits With Gasoline ETF Ahead of Summer Driving Season).
GraniteShares Gold Trust (BAR - Free Report) – Up 10.4%
GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account. It is among the lowest-cost gold ETFs on the market, having an expense ratio of 0.17%. GraniteShares Gold Trust has amassed $1 billion in its asset base while trading in an average daily volume of 663,000 shares.