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Russia-Ukraine Crisis Spark Rally in Commodity ETFs

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The escalation in tensions between Moscow and Western countries over Ukraine has sparked a rally in a broad range of commodities. This is especially true as the tensions have led to supply disruption fears in an already-tight commodity market. Russia is a commodities powerhouse and a key supplier of energy, metals and agri (read: Russia-Ukraine Tensions Flare Up: ETF Strategies to Win).

Invesco DB Commodity Index Tracking Fund (DBC - Free Report) , which tracks a broad basket of the 14 most-heavily traded commodity futures contracts, has risen 6.4% in a month compared to a loss of 6.6% for the broad market fund (SPY - Free Report) . In fact, most ETFs and ETNs are hitting new 52-week highs. Some of these include iPath Series B Bloomberg Grains Subindex Total Return ETN , iPath Series B Bloomberg Industrial Metals Subindex Total Return ETN , Invesco DB Energy Fund (DBE - Free Report) , Invesco DB Agriculture Fund (DBA - Free Report) and United States Commodity Index Fund (USCI - Free Report) .

Gold topped $1900 per ounce due to its safe-haven status. Russia is the world's third-largest producer of gold as well. Oil is approaching $100 per barrel as the war between Russia and Ukraine is expected to disrupt oil and natural gas supplies to Europe. Nickel and aluminum prices soared to multi-year highs while wheat and corn also spiked. The conflict could disrupt grain flows from the key Black Sea export region.

Notably, Ukraine is a major exporter of corn and wheat. Together, Russia and Ukraine account for roughly 29% of the global wheat export market (read: Profit From These ETFs if Russia-Ukraine Crisis Escalates).

iPath Series B Bloomberg Grains Subindex Total Return ETN

iPath Series B Bloomberg Grains Subindex Total Return ETN follows the Bloomberg Grains Subindex Total Return, which delivers returns through an unleveraged investment in three futures contracts on grains commodities – soybeans, corn and wheat.

The note has been able to manage $36.3 million in AUM and trades in a paltry volume of roughly 6,000 shares per day. Its expense ratio is 0.45%.

iPath Series B Bloomberg Industrial Metals Subindex Total Return ETN

iPath Series B Bloomberg Industrial Metals Subindex Total Return ETN provides exposure to the Bloomberg Industrial Metals Subindex Total Return. The benchmark delivers returns through an unleveraged investment in four futures contracts on industrial metal commodities - aluminum, nickel, zinc and copper.

iPath Series B Bloomberg Industrial Metals Subindex Total Return ETN has gathered $15.5 million in its asset base while charging 45 bps in annual fees. The note trades in a paltry volume of 1,000 shares per day.

Invesco DB Energy Fund (DBE - Free Report)

Invesco DB Energy seeks to track changes in the level of the DBIQ Optimum Yield Energy Index Excess Return plus the interest income. The benchmark is a rules-based index composed of futures contracts on some of the most heavily traded energy commodities in the world — light sweet crude oil (WTI), heating oil, Brent crude oil, RBOB gasoline and natural gas.

Invesco DB Energy has AUM of $142.8 million and trades in an average daily volume of 104,000 shares. It charges 77 bps in annual fees (read: Sector ETFs to Benefit/Lose as Oil May Hit $120 Soon).

Invesco DB Agriculture Fund (DBA - Free Report)

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 soybeans, corn, wheat, coffee, live cattle, sugar, and cocoa with double-digit exposure each.

Invesco DB Agriculture Fund charges 93 bps on an annual basis and trades in volume of 1.3 million shares a day. It has amassed $1.2 million in its asset base.

United States Commodity Index Fund (USCI - Free Report)

United States Commodity Index Fund’s investment objective is the daily changes in percentage terms of its shares’ net asset value to reflect the daily changes in percentage terms of the SummerHaven Dynamic Commodity Index Total Return. The index is designed to reflect the performance of a portfolio of 14 commodity futures from 27 possible futures contracts.

United States Commodity Index Fund has amassed $266.1 million in its asset base and trades in a lower volume of about 48,000 shares a day. It has an expense ratio of 1.10%.

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