Exchange Traded Funds Indexing the Broad Commodities Markets - dummies

Exchange Traded Funds Indexing the Broad Commodities Markets

By Amine Bouchentouf

Because ETFs are now in a position to offer easy access to commodities, and because the number and type of commodities they cover has expanded, you can benefit from seeing which ETFs are out there to help with your investment needs.

PowerShares DB Commodity Index

The DB Commodity Index (NYSE: DBC) was the first ETF of its kind to track a commodity index. Launched in 2006, it tracks the performance of the index with the same name, a product courtesy of Deutsche Bank. This ETF gives you broad exposure to this index, which holds several of the most liquid commodities traded in the market, including crude oil, gasoline and heating oil, gold, copper, zinc, and sugar.

iPath DJ-UBS Commodity Index

The DJ-UBS Commodity Index ETF (NYSE: DJP) tracks the index of the same name, which is jointly managed by news service Dow Jones and investment bank UBS. Like the DBC, the DJP gives you broad exposure to the commodity markets. However, unlike the DBC, this index ETF gives you a different mix of exposure, which is generally more overweight industrial commodities such as energy and base metals.

If you’re looking for a very broad commodity exposure that includes energy, precious metals, industrial metals, agriculture, and livestock, take a look at the DJP. Read through the prospectus carefully to see what kind of commodities the index tracks, because the mix often changes.