Hard-asset ETFs can be used to both diversify a portfolio as well as protection from both inflation and broader market turmoil, comments Don Dion for TheStreet.

Some hard asset ETFs don’t hold futures or physical commodities. Instead, these funds track indexes made up of the stock of commodity producers. Some broad equity-based, hard-asset ETFs include:

• SPDR S&P Metals & Mining (NYSEArca: XME), currently up 66.8% year-to-date, includes U.S. metals and mining companies. The fund has an expense ratio of 0.35%.
• Market Vectors RVE Hard Assets Prod ETF (NYSEArca: HAP), currently up 29.9% year-to-date, this fund seeks to reflect the Rogers-Van Eck Hard Assets Producers Index, which is often quoted as the definitive commodity equities benchmark. HAP also holds water and renewable energy components in its portfolio.

iPath offers both broad and specific exposure to hard assets with a line of exchange traded notes (ETNs) that track the futures contracts and Treasuries. Potential investors in these ETNs should be aware of regulatory actions that the Commodity Futures Trading Commission (CFTC) may impose.

• iPath DJ AIG Ind Metals TR Sub-Idx ETN (NYSEArca: JJM): up 45.6% year-to-date; includes a basket of commodities.
• iPath DJ AIG Tin TR Sub-Idx ETN (NYSEArca: JJT): up 42.3% year-to-date
• iPath DJ AIG Platinum TR Sub-Idx ETN (NYSEArca: PGM): up 32.5% year-to-date
• iPath DJ AIG Lead TR Sub-Idx ETN (NYSEArca: LD): up 114.7% year-to-date
• iPath DJ AIG Aluminum TR Sub-Idx ETN (NYSEArca: JJU): up 10.5% year-to-date

ETF Securities has successfully launched global physical-asset ETFs:

• ETFS Silver Trust (NYSEArca: SIVR): up 9.8% in the last month
• ETFS Gold Trust (NYSEArca: SGOL): down 1.3% in the last week

Larry Swedroe, principal and director at Research at BAM advisor Services and at Research for Buckingham Family of Financial Services, says that purchasing commodities is a way to protect against supply shocks and event risks that could negatively influence a portfolio of stocks and bonds, according to iStockAnalyst.

Swedroe also argues that position limits on commodity ETFs are “purely politically driven,” which could create conditions of more volatility. The ultimate outcome, he says, will result in the value of contracts being driven higher and people having to pay more for insurance.

For more information on commodities, visit our commodity category.

Max Chen contributed to this article.

The metal hit record highs this week after producers in China agreed to cut output by as much as 10%, reducing concerns over an abundance of inventories, reports Rob Wherry for SmartMoney.

Aluminum Corp. in China has agreed to curb supply by 5% to 10%, which will help alleviate a sixth year of power shortages in China, reports Xiao Yu for Bloomberg. The energy used by aluminum smelters every week is enough to provide power to more than two million people for a year. China’s aluminum producers are the largest in the world.

Alcoa (AA) also reported earnings that surpassed expectations this week, but they’re still below last year’s level. The company is still awaiting an economy whose demand level is expected to grow around 6% this year, reports David Lee Smith of The Motley Fool.

Aluminum benefits from its versatile uses, and is prized for its lightweight properties as well as its ability to resist corrosion. Among its applications is in foil, soda cans, cooking equipment, golf clubs, airplanes, electricity and in buildings.

Among the funds that hold the metal are:

• PowerShares DB Base Metals (DBB): up 14.9% year-to-date; holds 37.7% in aluminum, so expect a shiny outlook
• iPath Dow Jones-AIG Aluminum ETN (JJU): launched on July 8