The spike in investor interest in funds like United States Natural Gas (NYSEArca: UNG), PowerShares DB Commodity Index Fund (NYSEArca: DBC), PowerShares DB Agriculture Fund (NYSEArca: DBA) has resulted in creation halts and strategy reconstruction as the Commodity Futures Trading Commision (CFTC) scrutinizes the industry, writes Don Dion for TheStreet. (More on the CFTC’s commodity limits).

The iPath Dow Jones AIG Platinum TR Sub Index (NYSEArca: PGM) recently had to halt creation in order to remain within position limits. (Regulation hits platinum ETN). And most recently, PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP) had to rush to get  approval to create new shares as trading volume suddenly picked up. (Bullish dollar ETF granted new shares).

Traditional ETFs track underlying indexes, which is made possible through the share creation and redemption process. When the creation process is halted, it creates premiums to an ETF’s underlying value. The result is an environment good for shareholders but bad for investors chasing the trend.

As an investor, you should be aware of when an ETF’s share creation has been suspended and understand that if a futures-based ETF runs out of shares, this could happen. If you’re already holding such an ETF, monitor your funds to be sure that all is running smoothly. The risk of holding a fund with suspended share creation is that when normal trading resumes, losses could be incurred as the premium disappears.

For more information on ETF trading, visit our ETF 101 category.

Max Chen contributed to this article.

The price of commodities surged from March to June, but growth has slowed since then, remarks Harvey Jones for The Motley Fool. For the long-term, investment guru Jim Rogers thinks the current commodities bull market will run till 2022. (More on Jim Rogers).

The spike in commodities prices was attributed to Chinese demand for raw materials and financial speculators looking to offset potential falls in the dollar and inflation. (How to play a weak dollar). The rally was not driven by a global recovery in trade and economic activity. Eventually, countries and especially emerging markets will be demanding commodities to feed and drive their economies.

There is a possibility of deflation, which could quickly reduce commodity prices.

Individual commodities have many different factors that affect the their prices. Commodities have varying economic cycles, most are non-correlated to equities and some commodities prices change with the weather. One of the basic factors is that of supply and demand.

Rather than trying to guess which commodity will outperform, you may want to consider a broad-based ETF that gives exposure to the total asset class. Also be sure to have a strategy; you can read about the one we use here.

For more information on commodities, visit our commodity category.

• iShares S&P GSCI Commodity-Indexed Trust (NYSEArca: GSG): up 14.2% for the year; Almost half of the index reflects crude oil, and the balance is split between other energy products such as natural gas as well as agricultural commodities, industrial and precious metals and livestock.

• iPath Dow Jones-AIG Commodity Index Fund ETN (NYSEArca: DJP): up 17.1% for the year; has holdings in oil, copper, natural gas, gold, aluminum, zinc, sugar and more.

• PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC): up 13.7% for the year; has weightings in heating oil, natural gas, oil, silver, corn, wheat and soybeans.

Max Chen contributed to this article.

In the short-term, the fourth quarter could be volatile for gold prices, and some analysts believe gold will be vulnerable to pullbacks if the dollar appreciates or liquidation occurs, writes Melinda Peer for Forbes. But physically-backed ETFs, such as the SPDR Gold Shares (NYSEArca: GLD), are currently picking up on weaker dollar expectations.

ETF Securities is expanding its physically-backed investment products and recently launched ETFS SIVER TRUST (NYSEArca: SIVR) and ETFS GOLD TRUST (NYSEArca: SGOL). Both funds are 100% backed by the physical assets held in London and Switzerland, respectively.

Meanwhile, potential regulations coming forth from the Commodity Futures Trading Commission (CFTC) has some funds doing a little shuffling.

PowerShares is restructuring its funds in an attempt to take advantage of loopholes to meet the “safety position limits,” remarks Don Dion for TheStreet. The ETFs PowerShares DB Agriculture (NYSEArca: DBA) and PowerShares DB Commodity Index Tracking (NYSEArca: DBC) will reduce positions in corn and wheat futures by the end of October.

DBA and DBC invest in commodities futures to achieve their intended tracking strategies. In addition to reducing their current positions, DB will take positions in coffee, cocoa, live cattle, copper, natural gas and gasoline. This will allow the fund to continue to operate within limits.

DBC will start investing in oil futures contract traded in Europe – a loophole that allows the fund to reduce U.S. oil holdings while adding foreign holdings.

Managers of United States Natural Gas (NYSEArca: UNG) have already cut back on natural gas futures contracts listed in the United States in favor of swaps elsewhere.

The CFTC has noted its intent on increasing position limits placed on future-based commodity ETFs. ETF managers have already stoped creation of new shares, shut down funds and restructured underlying investment strategies.

For more information on commodities, visit our commodity category.

Max Chen contributed to this article.

United States Natural Gas (NYSEArca: UNG) rolled its October contracts and bought November contracts on Sept. 14. The roll will wrap up today, reports Asjylyn Loder for Bloomberg. John Hyland, chief investment officer for the fund, said that the speculators had “only a random chance of being right.”

Meanwhile, it was widely expected that the Commodity Futures Trading Commission (CFTC) would move in on the energy sector first, but the CFTC revoked position limit exemptions in wheat and corn for two Deutsche Bank AG PowerShares commodity funds: PowerShares DB Commodity Index Tracking (NYSEArca: DBC) and PowerShares DB Agriculture (NYSEArca: DBA), effective at the end of October, writes Nevil C. Speer for Cattle Network.

As these new regulations are discussed, many wonder what the implications could ultimately be.

Commodity related ETFs are usually “long-only” positions that focus on the buy side in the market. It is the long position that has many believing these types ETFs are helping to artificially drive up market prices. Others argue that market prices have little to do with ETFs but with fundamentals – supply and demand are seen as the real drivers of commodity prices.

If the CFTC begins regulating the industry, some believe that restrictions added could divert funds to less regulated exchanges and cause hedging business overseas to move to other markets with different regulations. In the meantime, other funds may limit issuance of new shares in the coming months, which would reduce liquidity in the markets.

The regulations imposed by the CFTC could eventually distort prices in the markets and risk management could become more difficult to handle.

A new Thompson Reuters/Jefferies In-The-Ground CRB Global Commodity Equity Index is expected to launch this week, and it says it will help investors bypass futures-based commodity exposure while still playing in the commodity universe.

Kevin Noblet for The Wall Street Journal explains that the index tracks the equity prices of commodity-producing companies, rather than the commodities themselves. Commodity-related equities don’t change in value as monthly contracts expire, so they can skip around the regulation imposed by the CFTC.

About 70% of the companies’ assets are “in the ground,” which is what the name of the index refers to. The companies deal with energy, precious and industrial metals, as well as agriculture products.

ETFs based on the index are in the works from ALPS Advisors and sub-advisor Arrow Investment Advisors.

Matt Kranz for USA Today says that commodity ETFs are fine for investing, so long as investors understand their risks. During inflation, prices rise rapidly, and investors, savers and bondholders all suffer. Commodity-related investments and ETFs are perfect buffers for inflationary periods.

Just beware, however, as commodities prices already reflect current inflation expectations, so you could lose money if inflation is lower than people fear.

Watch the trend lines to protect yourself.

• iShares S&P GSCI Commodity Index Fund (NYSEArca: GSG): up 5.3% year-to-date

• PowerShares DB Commodity Index (NYSEArca: DBC): up 3% year-to-date

• Greenhaven Continuous Commodity Index (NYSEArca: GCC): up 6.5% year-to-date

For more stories about commodities, visit our commodity category.

iPath Dow Jones AIG Natural Gas ETN (GAZ) is the third commodity-focused exchange traded product to stop issuing new shares over the past few weeks. GAZ posted large inflows after United States Natural Gas (UNG) suspended any issuance of new shares. GAZ began the year with $20 million in assets, and by the time it decided to stop issuing new shares, it had amassed $187 million.

Yesterday, UNG entered into another natural gas-related total return swap yesterday (reported on their website at end of day) in order to reduce their holdings in listed futures contracts. The swap was for $500 million.

“This is an attempt by UNG to deal with whatever new regulations may be introduced by the CFTC and to allow us to permit creations of new units,” John Hyland, chief investment officer at United States Commodity Funds, said in an email.

UNG’s actions yesterday, and the natural gas-based swap the fund entered into a few weeks ago, Hyland said, are not enough by themselves to yet allow us to either meet what they think the CFTC limits may be. The provider feels that they are making progress, though.

Earlier in the week, PowerShares DB Crude Oil Double Long ETN (DXO) also stopped issuing shares, also in anticipation of new CFTC limits. The new regulations were imposed after the UNG fund, along with the commodity market in general, was accused of manipulating futures prices and market fluctuations.

The CFTC did rule yesterday that PowerShares DB Commodity Index Fund (DBC) and PowerShares DB Agriculture Fund (DBA) are no longer exempt from position limits in wheat and corn.

Meanwhile, we may be seeing other commodity-based notes and funds temporarily suspend trading while they wait for an official CFTC decision.

For more stories about ETNs, visit our ETN category.

Two funds issued by PowerShares will no longer be exempt from U.S. position limits in wheat and corn, forcing a shift in their holdings to comply with federal trading restrictions.

Asjylyn Loder and Tina Seeley for Bloomberg report that PowerShares DB Commodity Index Fund (DBC) and PowerShares DB Agriculture Fund (DBA) will have to comply with caps designed to keep a one investor from gaining too much control of the market, according to the CFTC. Together, the two ETFs are worth $5.8 billion.

Deutsche Bank says that the funds are going to continued to conduct business “in the normal course.” The Securities and Exchange Commission (SEC) filing said:

As of Oct. 31, the funds will be subject to federal limits of 13,500 Chicago Board of Trade corn contracts in any non-spot month, and 5,000 wheat contracts, and an all-months combined limit of 22,000 corn contracts and 6,500 wheat contracts.

The repeal of these exemptions are in response to suspicions that such ETFs could be having an undue influence on the prices of certain commodities. The imposition of these limits could be bad news for commodity funds, as these ETFs have been under the microscope lately.

In July and August, the CFTC conducted hearings in order to see whether they should crack down on speculation. The provider of United States Natural Gas (UNG) vigorously defended their funds and dismissed  accusations that they were affecting the markets.

CFTC Chairman Gary Gensler suggested that limits on oil and gas markets, as well as carbon trading, could be next, report Carolyn Cui and Sarah N. Lynch for The Wall Street Journal.

Timothy Gardner for Reuters reports that Congress is debating a bill that would set up an emissions market under which the government would set a cap on greenhouse gas pollution that declines over time and polluters and investors would buy and sell the rights to release greenhouse gases. Who would ultimately regulate this market is still a question mark.

For more stories about Commodities or ETF Trends in the press, visit our Commodity or In The Press categories.

The major consequence is inflation.  The likelihood that the government will stop printing money is not high at the moment – no one wants to cut off economic aid prematurely. But printing could have an unwanted side effect: inflation, states Martin Denholm of Smart Profits Reports.

The following are ways to soften the blow of inflation:

• Take a look at the grandfather of inflation protection, gold. It can be accessed through the SPDR Gold Trust (GLD)

• Another hedge could be found in inflation adjusted treasuries, represented by the iShares Lehman TIPs Bond (TIP). These are Treasury bonds, essentially, that hedge against inflation.

• Energy equities such as the Vanguard Energy ETF (VDE). Energy is a factor in the cost of nearly anything you can think of, and oil and gas are priced in U.S. dollars. As the dollar weakens, energy becomes more appealing around the world.

• Through traditional commodities such as a broad-based commodity fund such as the PowerShares DB Commodity Index Tracking (DBC). Commodities tend to go on an uptrend in periods of inflation.

Before you act, though, have a strategy and watch the trend lines in order to see where opportunities are actually taking place.

For more stories on commodities, visit our commodities category.

Kevin Grewal contributed to this article.

It is clear that the emerging market is recovering faster than developed ones, according to ETF Grind. While developed markets are spurred by consumption, emerging markets are driven by investments. ETF Grind provides some funds that an investor may peruse so as to capitalize on the emerging markets over the next few years.

We should note, too, that there are many other ETFs that can provide similar exposure as the world decouples – this is merely a sampling:

• First Trust ISE Glb Engineering and Construction (FLM): up 12.2% year-to-date. The FLM  includes firms that specialize in designing and building infrastructure products. It also includes big-margin engineering and design firms, and focus less on materials and equipment.
• iShares MSCI BRIC Index (BKF): up 53.4% year-to-date. Emerging market funds often include countries that may not decouple as easily, such as South Korea, Mexico and Poland. But BKF provides exposure to the four BRICs emerging markets.
• PowerShares Emerging Markets Infrastructure (PXR): up 55% year-to-date. PXR it invests almost exclusively in firms that build infrastructure, and not in companies that operate and maintain infrastructure. The fund includes emerging market leaders and a few Western companies.
• Claymore/Delta Global Shipping (SEA): up 32.7% year-to-date. SEA invests in companies within the global shipping industry.
• PowerShares DB Commodity Index Tracking (DBC): up 12.7% year-to-date. DBC invests in the six most traded commodities: crude oil, heating oil, aluminum, wheat, gold, and corn.
• iShares S&P Global Materials (MXI): up 30.5% year-to-date. MXI tracks globally active firms that deal in materials. The fund is heavily weighted toward firms situated in developed markets, but they are international conglomerates with operations in emerging markets.
• Emerging Global Shares DJEM Energy Titans (EEO): This brand new fund holds 40 energy firms in emerging markets.  It is weighted toward Russian companies, which make up around one-third of the holdings.
• CurrencyShares Australian Dollar Trust (FXA): up 15% year-to-date. The Australian Dollar is a true “commodity currency” since its value is dependent the country’s natural resource exports.
• Market Vectors Agribusiness ETF (MOO): up 36.2% year-to-date. MOO invests in international agribusinesses.
• WisdomTree Dreyfus Emerging Currency (CEW): up 0.4% in the last week. CEW is new on the scene. It invests in a range of emerging market currencies that could appreciate against the U.S. dollar. It includes currencies such as the Chinese Yuan, Indian Rupee, Brazilian Real and South African Rand.

Emerging markets do have a higher risk profile than those of established foreign and U.S. markets, writes Jim Lowell for MarketWatch. But high inflows into emerging market ETFs warrants another look into this potentially lucrative area. Lowell provides the following areas of interest in the emerging markets:

Brazil. It is a viable and diversified economy that has also has good ties to the global economy.

• iShares MSCI Brazil Index (EWZ): up 64% year-to-date

South Korea and Taiwan can be traded depending on the technology sector.

• iShares MSCI South Korea (EWY): up 33.8% year-to-date
• iShares MSCI Taiwan Index (EWT): up 50.2% year-to-date

India moves along side with the global economy and China is an economic powerhouse in the global stage.

• PowerShares India (PIN): up 57.8% year-to-date
• iShares FTSE/Xinhua China 25 Index (FXI): up 35.9% year-to-date

In Emerging Europe, Russia could be played in relation to the price of oil.

• Market Vectors Russia ETF (RSX): up 97% year-to-date

Israel has strong industries in technology, biotech, and defense.

• iShares MSCI Israel Cap Invest Mkt Index (EIS): up 40.1% year-to-date

South Africa is noted for its metals and mining, or gold industry.

• iShares MSCI South Africa Index (EZA): up 27.6% year-to-date

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

For full disclosure, some of Tom Lydon’s clients own shares of MOO.

Max Chen contributed to this article.

The positive aspects of commodities include a great hedging tool, they provide diversification and have had equity-like risk and return characteristics, according to a number of studies.  As a result of this, many new ETFs and exchange traded notes (ETNs) have come to market, giving retail investors more options than ever before, states Living4Dividends at Seeking Alpha.

The downsides of commodities are that they are volatile.  But this should not deter an investor from considering commodities as an investment.  It’s just important to know what you own, read up on commodities and have a strategy at the ready.

There are a number of ways to get exposure to commodities: you can invest in single-country funds, broad commodity ETFs or single commodity ETFs.

Some ETFs to consider are the following:

• PowerShares DB Agriculture Fund (DBA): up 1.9% year to date.

• iShares GSCI Commodity Indexed Trust (GSG): down 2% year to date

• PowerShares DB Commodity Index Tracking Fund (DBC): up 2% year to date

Kevin Grewal contributed to this article.