7 Best-Performing Commodity ETFs for February 2024

Commodity exchange-traded funds can help hedge against inflation and global conflict. Here are the top-performing commodity ETFs.
Alana Benson
By Alana Benson 
Updated
Edited by Pamela de la Fuente

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.


The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Nerdy takeaways
  • Commodity ETFs are baskets of investments that focus on oil, corn, gold, soybeans and other commodities.

  • Commodity ETFs may help diversify your portfolio.

  • Highly focused commodity ETFs may carry more risk than well-diversified ETFs.

MORE LIKE THISInvestingFunds

What is a commodity ETF?

A commodity ETF is an exchange-traded fund that invests in physical commodities such as agricultural products, energy sources and metals. Commodity ETFs often grow in popularity when there is global conflict or high inflation, as commodities are always needed by consumers. Other purchases — for example, luxury goods or discretionary items — may be put off during difficult times.

If you invest in a broad commodity ETF, it may include some of the following types of commodities:

  • Oil.

  • Wheat.

  • Gold.

  • Silver.

  • Corn.

  • Soybeans.

If you invest in a more focused commodity ETF, it will likely invest in just one type.

Best-performing commodity ETFs

Ticker

Name

5-year return

BCD

abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF

9.01%

PDBC

Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF

8.97%

AAAU

Goldman Sachs Physical Gold ETF

8.87%

OUNZ

VanEck Merk Gold Trust

8.76%

FTGC

First Trust Global Tactical Commodity Strategy Fund

8.73%

IAUF

iShares Gold Strategy ETF

7.69%

COM

Direxion Auspice Broad Commodity Strategy ETF

7.50%

Source: VettaFi. Data is current as of market close on February 1, 2024. Data is intended for informational purposes only.

Advertisement
NerdWallet rating 

4.9

/5
NerdWallet rating 

5.0

/5
NerdWallet rating 

4.7

/5

Fees 

$0

per trade

Fees 

$0

per trade

Fees 

$0

per trade

Account minimum 

$0

Account minimum 

$0

Account minimum 

$0

Promotion 

None

no promotion available at this time

Promotion 

None

no promotion available at this time

Promotion 

Get up to 75 free fractional shares (valued up to $3,000)

when you open and fund an account with Webull.

How to invest in commodity ETFs

Investing in commodity ETFs is fairly easy, but if you don't have a brokerage account already, you'll need to follow a few steps first.

1. Open an investment account

An investment account is simply where your investments themselves – and the money you plan to spend on them – live. Some investment accounts have significant tax benefits over others, so it's worth reading up on which type of investment account is right for you. Once you know which type of account you'd like to open, you can read our roundup of the best online brokerage accounts to find one that fits your needs.

2. Research commodity ETFs

Most online brokerage accounts will have screening tools that can help you search through commodity ETFs. When comparing ETFs, make sure you look at the following metrics to help narrow down your options:

Expense ratios

Expense ratios are annual fees that are taken as a percentage of your assets. For example, if the fund charges a 1% expense ratio, and you have $10,000 invested, you'll pay $100 in fees annually. ETFs tend to have lower expense ratios than actively managed funds, and you may be able to find commodity ETFs with expense ratios around 0.20%. Keep in mind, you'll never see expense ratios show up on monthly statements. These fees are taken out automatically, so it's important to know how much you'll lose to fees before you invest. Check out our mutual fund fee calculator to see how much a fee can cost you over time.

Volume

This shows how many shares traded hands over a given time period — it’s an indicator of how popular a particular fund is.

Holdings

Most funds will show you their top ten holdings, which means the ten companies that take up the biggest percentage of a fund.

Performance

Sure, past performance doesn’t indicate future returns, but a fund's history can be useful. Look at a fund's long-term performance, so three-year, five-year or 10-year performance instead of one-year for example, to get a sense of how it has performed historically.

3. Purchase the commodity ETF

The process for buying commodity ETFs is similar to the process for buying stocks. Navigate to the “trading” section of your brokerage’s website and search for the ETF using its name or ticker symbol and enter either how many shares you'd like to purchase or the dollar amount you'd like to purchase. Check out our guide on how to buy ETFs for more information.

Track your finances all in one place.
Find ways to save more by tracking your income and net worth on NerdWallet.

Why invest in commodity ETFs?

Commodity ETFs can help round out an investment portfolio. They offer diversification by providing exposure to additional economic sectors. That way, if one sector is performing poorly, another sector may be able to boost it. For example, if you invest in an oil commodity ETF and a clean energy ETF, you're protecting your portfolio against economic volatility. If a foreign war is making oil more expensive, clean energy may get a boost. If the price of solar panels go up, oil become more attractive to consumers. This formula doesn't always work perfectly, but it may help your investments enjoy some stability.

Pros and cons of commodity ETFs

Commodity ETF pros

  • Commodities can help hedge against inflation.

  • Commodity ETFs may help diversify your portfolio, depending on what you’ve already invested in.

Commodity ETF cons

  • Commodities are often at the whim of geopolitical and climate events. If you invest in a wheat ETF and there's widespread drought, for instance, your ETF may not perform well.

  • If you invest too much in any one particular commodity, that may cancel out its diversification benefits.

» Looking for more diversification? Check out the best ETFs

AD
Robinhood
NerdWallet rating 

on Robinhood's website

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.