Bank on rising commodity prices with these specialized and diversified commodity ETFs. Here's how to own commodities including gold, silver, oil, natural gas, cattle, corn, soybeans and more.
Exchange-traded funds have opened up the world of commodities to investors who never had access to them before. The commodity ETFs below allow you to buy everything from precious metals (gold and silver) to oil, natural gas, and even obscure commodities like coffee, soybeans, and corn.
Metals like gold and silver are perfect for exchange-traded funds because they don't go stale like food commodities, and are easy to store unlike flammable natural gas and oil. The SPDR Gold Shares and iShares Silver Trust are the biggest and most popular ETFs for buying gold and silver, carrying annual expense ratios of 0.40% and 0.50%, respectively.
These funds simply track the movements in the spot price for gold and silver by holding physical precious metals in storage at large banks around the world. The silver ETF holds silver at Brink's in London, and JPMorgan in London and New York. HSBC is the custodian for the gold in the SPDR Gold Trust.
Because these ETFs hold physical precious metals, they closely track the ups and downs in the value of gold and silver, resulting in returns that differ only by the modest annual expense ratios for each fund. To leverage the rise in gold and silver prices, consider investing in gold or silver miner ETFs.