2014 Commodity Exposure: Futures Vs. ETFs
Throughout the year, we track a simple strategy of buying the 12 month out Futures contract against the commodity ETFs that supposedly track those very same futures, to see just how the performance lines up; knowing that ETFs typically are the ones that underperform because of the contract roll. For more on how this looks long term, see our recent deeper look into the United States Oil ETF, LP (NYSEARCA: USO ) . But regardless of whether you’re tracking correctly – the concept of buying and holding commodities, whether it be via futures, or via ETFs via futures – isn’t proving to be all that great anyway, with an average performance of -7%, compared to the ETFs -11% (and -12% and -16% if don’t include Coffee). It was one of the worst years ever for long only commodities, with the PowerShares DB Commodity Index Tracking ETF (NYSEARCA: DBC ) falling -28% {Past performance is not necessarily indicative of future results}. We’re biased, of course; but we think the better way to have commodity exposure in your portfolio is a “Long/Short” Commodity Strategy; which profits from the rise or fall in prices. We’re talking about Managed Futures, which as a whole, had one of its best years since 2008 . {Past performance is not necessarily indicative of future results}. (Disclaimer: Past performance is not necessarily indicative of future results) (Disclaimer: Sugar uses the October contract, Soybeans the November contract.) Long/Short Ag Trader CTA = Barclayhedge Ag Traders Index) Now that you’ve read this, are you Bullish or Bearish on ? Bullish Bearish Sentiment on ( ) Thanks for sharing your thoughts. Why are you ? Submit & View Results Skip to results » Share this article with a colleague