The correlation of hard assets and materials exchange traded funds(ETFs) are related to the emerging market spectrum. Does your portfolio overlap in some of these areas?

The recent great commodity boom has had a lot to do with China. The Chinese began tightening credit roughly eight months ago, crimping growth in these areas. And while it is the right policy for the Chinese to curb double-digit GDP growth and its perhaps too-hot property market, the ripple effect is in full force, says Gary Gordon for ETF Expert.

Gordon highlights the risks of having both commodity exposure and emerging markets exposure in your portfolio. Many of the major exports of these countries are commodities: South Africa produces platinum, Chile produces copper, Russia produces oil and…you get the picture. The ETFs that track these countries are often, in effect, commodity plays. [How China’s Belt Tightening Affects ETFs.]

Be aware of which commodities you are holding in your ETF portfolio, and which countries are highly associated with the specific commodity in order to avoid overlapping exposure. When commodity markets are trending up, this may not be such a bad thing, but in challenged times like these, you may be hurting your portfolio more than you intended. [The Case for Investing in Gold ETFs.]

For more stories about hard assets, visit our basic materials category.

Tisha Guerrero contributed to this article.

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.