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Commodities have been enjoying a hot streak in March. Inflationary pressure along with the tensions between Moscow and Western countries has pushed commodity prices to levels not seen since the financial crisis.
While most commodity ETFs have been soaring, iPath Series B Bloomberg Nickel Subindex Total Return ETN , United States Brent Oil Fund (BNO - Free Report) , Teucrium Wheat Fund (WEAT - Free Report) , iPath S&P GSCI Total Return Index ETN and United States Oil Fund (USO - Free Report) have been the show stealers.
Strong Trends
The United States, Europe, the United Kingdom, Canada, Australia and Japan have slapped a slew of sanctions and restrictions on Russia in lieu of the attack on Ukraine. These have led to supply disruption in an already-tight commodity market, resulting in shortages of food and energy. Inflation has been flaring up further due to higher energy and food prices (read: 6 ETF Areas Rallying Amid the Russia-Ukraine Crisis).
Both Russia and Ukraine are among the world’s biggest producers of commodities, especially oil, gas, and metals, base metals and specialty metals. Both countries are also the major producers of agricultural products.
Aluminum prices have been skyrocketing over the past month after Australia decided to ban alumina and bauxite exports to Russia. These are used to make the metal. Nickel saw wild swings over a couple of weeks with price surges, technical glitches and trading suspensions while zinc surged on concerns that high energy costs will lead to further smelter curtailments.
Oil prices hit $130 per barrel in early March before retreating in recent sessions on another wave of lockdown, which may impact demand in the world's biggest crude importer. Meanwhile, wheat and corn prices have also been on the rise with the ongoing war hitting supplies in several parts of the world.
We have highlighted the above-mentioned ETFs in detail:
iPath Series B Bloomberg Nickel Subindex Total Return ETN – Up 64.6%
iPath Series B Bloomberg Nickel Subindex Total Return ETN follows the Bloomberg Nickel Subindex Total Return, which delivers returns through an unleveraged investment in the futures contracts on nickel (read: Best ETF Areas YTD Amid Stocks' Fifth-Worst Start in 95 Years).
The note has been able to manage $67.4 million in AUM and trades in a paltry volume of roughly 98,000 shares per day. Its expense ratio is 0.45%.
United States Brent Oil Fund (BNO - Free Report) – Up 25.2%
United States Brent Oil Fund provides direct exposure to the spot price of Brent crude oil on a daily basis through futures contracts.
United States Brent Oil Fund has amassed $301.2 million in its asset base and charges 1.13% in annual fees and expenses. Volume is good as it exchanges 3.1 million shares a day on average.
Teucrium Wheat Fund provides investors an easy way to gain exposure to the price of wheat futures in a brokerage account. It uses three futures contracts for wheat, all of which are traded on the CBOT Futures Exchange. The three contracts include the second-to-expire contract, weighted 35%; the third-to-expire contract, weighted 30%; and the contract expiring in December following the expiration month of the third-to-expire contract, weighted 35%.
Teucrium Wheat Fund has amassed $67.4 million in its asset base and trades in a good volume of about 410,000 shares a day. It charges a fee of 1.14% per year.
iPath S&P GSCI Total Return Index ETN – Up 22.5%
iPath S&P GSCI Total Return Index ETN provides exposure to the S&P GSCI Total Return Index. The benchmark delivers returns through an unleveraged investment in the contracts comprising the Index plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts.
iPath S&P GSCI Total Return Index ETN has gathered $51.3 million in its asset base while charging 70 bps in annual fees. The note trades in a moderate volume of 39,000 shares per day.
United States Oil Fund is the most popular ETF in the oil space with an AUM of $3.5 billion and an average daily volume of 9 million shares. It seeks an average daily percentage change in USO’s net asset value for any period of 30 successive valuation days, to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.
Image: Bigstock
5 ETFs Leading the Commodity Rally in March
Commodities have been enjoying a hot streak in March. Inflationary pressure along with the tensions between Moscow and Western countries has pushed commodity prices to levels not seen since the financial crisis.
While most commodity ETFs have been soaring, iPath Series B Bloomberg Nickel Subindex Total Return ETN , United States Brent Oil Fund (BNO - Free Report) , Teucrium Wheat Fund (WEAT - Free Report) , iPath S&P GSCI Total Return Index ETN and United States Oil Fund (USO - Free Report) have been the show stealers.
Strong Trends
The United States, Europe, the United Kingdom, Canada, Australia and Japan have slapped a slew of sanctions and restrictions on Russia in lieu of the attack on Ukraine. These have led to supply disruption in an already-tight commodity market, resulting in shortages of food and energy. Inflation has been flaring up further due to higher energy and food prices (read: 6 ETF Areas Rallying Amid the Russia-Ukraine Crisis).
Both Russia and Ukraine are among the world’s biggest producers of commodities, especially oil, gas, and metals, base metals and specialty metals. Both countries are also the major producers of agricultural products.
Aluminum prices have been skyrocketing over the past month after Australia decided to ban alumina and bauxite exports to Russia. These are used to make the metal. Nickel saw wild swings over a couple of weeks with price surges, technical glitches and trading suspensions while zinc surged on concerns that high energy costs will lead to further smelter curtailments.
Oil prices hit $130 per barrel in early March before retreating in recent sessions on another wave of lockdown, which may impact demand in the world's biggest crude importer. Meanwhile, wheat and corn prices have also been on the rise with the ongoing war hitting supplies in several parts of the world.
We have highlighted the above-mentioned ETFs in detail:
iPath Series B Bloomberg Nickel Subindex Total Return ETN – Up 64.6%
iPath Series B Bloomberg Nickel Subindex Total Return ETN follows the Bloomberg Nickel Subindex Total Return, which delivers returns through an unleveraged investment in the futures contracts on nickel (read: Best ETF Areas YTD Amid Stocks' Fifth-Worst Start in 95 Years).
The note has been able to manage $67.4 million in AUM and trades in a paltry volume of roughly 98,000 shares per day. Its expense ratio is 0.45%.
United States Brent Oil Fund (BNO - Free Report) – Up 25.2%
United States Brent Oil Fund provides direct exposure to the spot price of Brent crude oil on a daily basis through futures contracts.
United States Brent Oil Fund has amassed $301.2 million in its asset base and charges 1.13% in annual fees and expenses. Volume is good as it exchanges 3.1 million shares a day on average.
Teucrium Wheat Fund (WEAT - Free Report) – Up 23.9%
Teucrium Wheat Fund provides investors an easy way to gain exposure to the price of wheat futures in a brokerage account. It uses three futures contracts for wheat, all of which are traded on the CBOT Futures Exchange. The three contracts include the second-to-expire contract, weighted 35%; the third-to-expire contract, weighted 30%; and the contract expiring in December following the expiration month of the third-to-expire contract, weighted 35%.
Teucrium Wheat Fund has amassed $67.4 million in its asset base and trades in a good volume of about 410,000 shares a day. It charges a fee of 1.14% per year.
iPath S&P GSCI Total Return Index ETN – Up 22.5%
iPath S&P GSCI Total Return Index ETN provides exposure to the S&P GSCI Total Return Index. The benchmark delivers returns through an unleveraged investment in the contracts comprising the Index plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts.
iPath S&P GSCI Total Return Index ETN has gathered $51.3 million in its asset base while charging 70 bps in annual fees. The note trades in a moderate volume of 39,000 shares per day.
United States Oil Fund (USO - Free Report) – Up 20.4%
United States Oil Fund is the most popular ETF in the oil space with an AUM of $3.5 billion and an average daily volume of 9 million shares. It seeks an average daily percentage change in USO’s net asset value for any period of 30 successive valuation days, to be 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 0.83% (read: More Rally in Oil ETFs in the Cards This Week?).