Commodity ETF's

Commodity ETF's are a recent addition to the financial industry that permits investors and traders to invest in an product that tracks the index of commodity based products or a basket of underlying commodity stocks. Exchange traded funds have grown popular in recent years as an alternative to investing in shares, options and futures. In the case of commodities, it is a less risky way to gain exposure that would otherwise require the use of derivatives. ETF's that comprise stocks also offset risk because the product is weighted according to the constituent stocks as opposed to one particular stock.

The following represents some commodity based ETF's:

PowerShares DB MS Agri (DBA)
This is an agricultural commodities ETF that is designed to track the Deutsche Bank Liquid Commodity Index-Optimum Yield Agriculture Excess Return Agriculture ER.
This is designed to reflect the agricultural sector. Investors and traders can take long or short positions in this ETF in accordance with their market objectives.

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PowerShares DB Cm Index (DBC)
This commodity exchange traded fund is also designed to track the performance of the Deutsche Bank Liquid Commodity Index-Excess Return.

iPath ETN DJ-AIG CITR A (DJP)
This ETF fund seeks to track the performance of the Dow Jones-AIG Commodity Index Total Return.

Market Vectors (Agribusiness): (MOO)
This funds invests up to 80% of available funds in US based business that have exposure to the agricultural sector.

iShares S&P GSCI Commmodity (GSG)
The ETF Trust seeks to replicate the investment results of the GSCI Excess Return Index.

PowerShares DB MS PMtl (DBP)
This commodity ETF is intended to reflect the precious metals sector by tracking the Deutsche Bank Liquid Commodity Index-Optimum Yield Precious Metals Excess Return

PowerShares DB MS Slvr (DBS)
This ETF fund tracks the Deutsche Bank Liquid Commodity Index-Optimum Yield Silver Excess Return which is based on the underlying price of silver.

Other Gold and oil based exchange traded funds are discussed in on the page related to that topic. Commodity ETF's are expected to gain increasing exposure as weather anomalies and the US dollar continues to come under pressure in response to changes in market forces and structure. As an alternative to outright shares, commodity exchange traded funds are a versatile investment vehicle that can be used for short term and long term directional trading. With the ability to take long or short positions, they can also be used for hedge management purposes.

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