3 commodity ETFs to invest in amid soaring inflation

on Mar 16, 2022
  • Commodity ETFs have done well in the past few months.
  • That’s because the prices of most commodities have risen sharply this year.
  • These three commodity funds will likely keep rising this year.

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Commodity prices have been in a remarkable rally in the past few months. This month, crude oil prices jumped to a multi-year high of $131 while gold, silver, and palladium soared. This performance has taken a breather although analysts expect that the bullish trend will resume. Here are some of the top commodity ETFs to buy.

SPDR Gold Trust 

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SPDR Gold Trust (GLD) is the biggest commodity ETF in the world with more than $65 billion in assets. The fund gives investors a simpler way to invest in gold and it often tracks its performance. It has an expense ratio of 0.40% and it owns over 34 million ounces of gold.

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Gold soared to a multi-year high of $2,072 this month and then retreated to the current $1,945. Still, there is a likelihood that it will maintain its bullish trend and retest its year-to-date high. The main driver will be demand for the metal from central banks as de-dollarization takes shape.

After US and western countries announced sanctions on Russia, many central banks will likely increase their gold exposure to diversify their reserves.

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Aberdeen Standard Physical Platinum Shares ETF

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The Aberdeen Standard Physical Platinum Shares (PPLT) is the biggest fund focused on the platinum market. It has over $1.3 billion in assets and an expense ratio of 0.60%

Like the GLD ETF, it tracks the performance of the platinum price. Like other commodities, platinum rose to a high of $1,180 this month. This was the highest it has been since June 16th. 

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While the price has retreated, fundamentals point to more demand for platinum from automakers. At the same time, there are supply challenges since Russia is the biggest seller of platinum. Therefore, PPLT seems like a good commodity ETF to watch.

Invesco DB Commodity Index Tracking Fund

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The Invesco DB Commodity Index Tracking Fund (DBC) is one of the leading commodity ETFs that has over $3.6 billion in assets. Unlike the other two funds we have looked at, the fund focuses on a group of commodities. Precisely, it looks at 14 commodities like crude oil, gasoline, gold, wheat, soybeans, and corn among others. 

As a result, the DBC fund has been in a strong bullish trend in the past few months. It soared to a high of $28.39 this month. This price represented a 64% 12-month increase. The fund offers the best way to invest in the most important global commodities at once.

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