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5 Best Commodity ETFs to Buy for Q1 2025
This page explains everything you need to know about the best commodity ETFs and how to invest in them. Find out what a commodity ETF is, the best places to invest, and discover the top five options on the market right now.
What are the top commodity ETFs to buy?
Copy link to sectionBelow, we have compiled our analysts’ consensus of the five best commodity ETFs to buy. In the table, you can find the full name of the ETF, along with its market ticker. To learn more about why each ETF is on our list, scroll down.
| # | ETF symbol | ETF name | Learn more |
|---|---|---|---|
| 1 | DBC | Invesco DB Commodity Index Tracking Fund | Learn more > |
| 2 | FTGC | First Trust Global Tactical Commodity Strategy Fund | Learn more > |
| 3 | COMT | iShares GSCI Commodity Dynamic Roll Strategy ETF | Learn more > |
| 4 | PDBC | Invesco Optimum Yield Diversified Commodity Strategy No K-1 | Learn more > |
| 5 | GSG | iShares S&P GSCI Commodity-Indexed Trust | Learn more > |
1. Invesco DB Commodity Index Tracking Fund (NYSEARCA: DBC)
Copy link to section- Current price: $23.15
- AUM: $1.76 billion
- Annual expense ratio: 0.85%
- YTD performance: 5.04%
- Annual dividend yield: 4.72%
The Invesco DB Commodity Index Tracking Fund (DBC) offers investors a strategic avenue to gain exposure across a diversified basket of commodities. Managed to track the DBIQ Optimum Yield Diversified Commodity Index Excess Return, this ETF includes futures contracts on 14 key commodities, ranging from energy sources like Brent and WTI crude oil to precious metals such as gold and silver.
These holdings are adjusted annually in November to ensure alignment with market conditions and commodity demand trends. DBC’s appeal lies in its comprehensive approach to commodity investing, which includes a mix of agricultural products like wheat and soybeans alongside industrial metals such as copper and aluminum.
This broad exposure not only provides a hedge against inflationary pressures but also positions the fund to capitalize on global economic cycles and geopolitical developments impacting commodity markets.
With a current annual dividend yield of 4.72%, DBC offers income potential while serving as a crucial component in diversifying an investment portfolio amidst evolving market dynamics.
2. First Trust Global Tactical Commodity Strategy Fund (NASDAQ: FTGC)
Copy link to section- Current price: $24.13
- AUM: $2.40 billion
- Annual expense ratio: 1.02%
- YTD performance: 7.53%
- Annual dividend yield: 3.11%
The First Trust Global Tactical Commodity Strategy Fund (FTGC) stands out in the world of commodities ETFs for its actively managed approach and strategic diversification across five key commodity sectors: energy, agriculture, industrial metals, precious metals, and livestock.
Unlike traditional index-based ETFs, FTGC employs a dynamic investment strategy that adjusts its commodity exposure based on market conditions and volatility forecasts. Managed by a team with expertise in alternative investments, FTGC aims to optimize returns while managing risk effectively, offering investors a balanced portfolio that capitalizes on market inefficiencies.
FTGC’s investment philosophy centers on maximizing returns within specific volatility parameters, ensuring a prudent risk/return profile. This active management approach not only seeks to enhance performance potential but also provides a hedge against inflation and economic uncertainties.
Investors interested in a well-rounded commodity ETF that blends strategic diversification with active management should consider FTGC. Its disciplined approach to commodity investing and robust track record since its inception in 2013 underscore its suitability for those looking to navigate the complexities of commodity markets while aiming for steady, long-term growth.
3. iShares GSCI Commodity Dynamic Roll Strategy ETF (NASDAQ: COMT)
Copy link to section- Current price: $27.20
- AUM: $986.03 million
- Annual expense ratio: 0.48%
- YTD performance: 8.50%
- Annual dividend yield: 4.82%
Navigating the diverse landscape of commodities requires a strategic approach, and the iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT) excels in this arena. This ETF distinguishes itself through a dynamic roll strategy that optimizes exposure across energy, metals, agriculture, and livestock sectors. Designed to minimize costs associated with futures investing, COMT offers investors a comprehensive tool for managing commodity price volatility while seeking potential capital appreciation.
Investors benefit from COMT’s efficient structure, which includes a low annual expense ratio of 0.48% and a competitive annual dividend yield of 4.82%. Moreover, COMT simplifies tax reporting by not requiring K-1 forms, streamlining the investment process for those looking to diversify their portfolios with commodities.
With its strategic focus on enhancing roll selection and total return performance, COMT remains a prudent choice for investors seeking to hedge against inflation or capitalize on global commodity market trends.
4. Invesco Optimum Yield Diversified Commodity Strategy No K-1 (NASDAQ: PDBC)
Copy link to section- Current price: $13.97
- AUM: $5.11 billion
- Annual expense ratio: 0.59%
- YTD performance: 5.04%
- Annual dividend yield: 4.02%
The actively managed Invesco Optimum ETF is designed to exceed the performance of DBIQ Optimum Yield Diversified Commodity Index Excess Return. This is an index composed of futures contracts on 14 of the world’s most heavily traded commodities including precious metals, industrial metals, agricultural materials, and commodities used in the energy sector.
The main reason this ETF is on our list is its sheer scale. It is the largest commodity ETF on the market, with nearly $5 billion worth of assets under the fund’s management. That size protects it against volatility and makes it a safe way to invest in commodities.
5. iShares S&P GSCI Commodity-Indexed Trust (NYSEARCA: GSG)
Copy link to section- Current price: $22.17
- AUM: $1.10 billion
- Annual expense ratio: 0.75%
- YTD performance: 10.52%
- Annual dividend yield: N/A
Amidst renewed inflation concerns and a resurgence in commodity prices, the iShares S&P GSCI Commodity-Indexed Trust (GSG) offers investors a straightforward pathway into the diverse world of commodities.
GSG tracks the S&P GSCI Total Return Index, which comprises a fully collateralized investment in futures contracts on a diversified group of commodities. The ETF’s holdings are well-balanced to reflect global commodity markets, making it a versatile tool for both short-term tactical plays and long-term portfolio diversification strategies.
For investors looking to hedge against inflation or express a bullish view on commodities, GSG presents an attractive option with its robust liquidity and established track record dating back to its inception in 2006.
Where to buy the best commodity ETFs
Copy link to sectionBuying ETFs – or trading them – can be achieved in the exact same way you would purchase a stock. Simply sign up to a broker, deposit funds and invest. Click any of the links below to sign up to one of our recommended platforms with low fees and instant execution.
eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
What is a commodity ETF?
Copy link to sectionA commodity ETF is a tradable fund that is designed to offer exposure to the price performance of a selection of commodities. A commodity is a raw material or agricultural product that can be bought and sold, while an exchange-traded fund (ETF) is a financial instrument that you can buy and sell on a stock exchange. They are designed to track the overall performance of a particular index or industry.
A commodity ETF can be a fund that simply tracks the price of something like oil or gold, or it can be a fund that owns stocks in companies that operate in a particular industry. For example, an oil ETF might own crude oil futures, or it might own stocks like BP, Shell, and Exxon.
Are commodity ETFs a good investment?
Copy link to sectionThat really depends on the specific commodity. Different commodities will perform well in different economic conditions. For example, industrial commodities like fossil fuels perform best when economic health is strong and investment in infrastructure is high. By contrast, safe haven commodities like gold perform best during times of high inflation and economic unrest.
Investing in a commodity ETF is a way to protect your portfolio from the fluctuations of owning just a single commodity. Investing in an ETF is also very simple, whereas some of the more popular ways of generating returns with commodities are more complex.
As commodity prices are heavily impacted by geopolitical events and international relations, it’s important to keep track of the latest news if you decide to invest. Things like Russia’s invasion of Ukraine can cause dramatic shifts in the commodity markets and need to be taken into account. Follow the most up to date news and analysis below.
Methodology: How we choose the best commodity ETFs
Copy link to sectionAt Invezz, we are dedicated to helping investors make informed decisions by providing authoritative, accessible, and engaging advice and recommendations. Our curated section of the best Exchange-Traded Funds (ETFs) is carefully selected by our team of experienced market analysts and reviewed by a sub-editor. This methodology outlines the rigorous process we follow to ensure our ETF recommendations are up-to-date, reliable, and insightful.
- Analyst research & recommendations: Our seasoned market analysts use their in-depth sector knowledge to identify ETFs with strong potential, ensuring they meet high standards of performance, liquidity, and market potential.
- ETF evaluation: We evaluate ETFs based on their underlying assets, historical performance, expense ratios, and tracking accuracy, alongside macroeconomic factors and sector trends.
- Fund performance reports: We assess ETFs through the latest performance reports, analyzing key metrics like returns, volatility, expense ratios, and assets under management (AUM).
- Sector analysis and external recommendations: Our detailed sector analysis, combined with recommendations from reputable sources like Barron’s and Zacks, provides an additional layer of validation for our selections.
- Quarterly review & refresh: We update our curated ETF list quarterly, re-evaluating each ETF based on the latest reports, industry developments, and market conditions to ensure our recommendations reflect the most current information available.
