The exchange traded fund (ETF) commodity pool has an increasing number of investment vehicles. After a five-year run in commodities and companies that mine, transport, process and sell them, commodity-based ETFs still remain on a growth spurt, reports Jim Lowell for Forbes. Both domestic and global economies continue to expand, creating more demand. At the same time, the lack of infrastructure to support the growth puts a strain on supply. If there were a measurable slowdown in demand for economic fuel and/or a de-escalation in supply, they could trigger a downslide.
PowerShares DB Commodity Index Tracking Fund (DBC) is comprised of light, sweet crude oil, heating oil, aluminum, gold, corn and wheat. The ETF is down 0.6% year-to-date and up 9.5% for the past year (it began trading in February 2006). iShares GSCI Commodity Indexed Trust (GSG) is down 1.5% year-to-date and holds 24 types of commodities (began trading in July 2006).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.