On the supply side, the U.S. Department of Agriculture expects stockpiles of wheat and soybeans will grow. Barclays projects copper and nickel will be in a surplus this year as well.
“There is a whole lot of inventory out there for many commodities,” John Stephenson, a manager at First Asset Investment Management Inc., said. “This will be a year of low prices, and I will stay away from agriculture and precious metals.”
While ETF investors can not track the price movement of copper directly, investors can try taking a look at he iPath Dow Jones-UBS Copper Total Return Sub-Index ETN (NYSEArca: JJC), which tracks copper futures. JJC fell 12.7% over the past year. The iPath DJ-UBS Nickel TR Sub-Idx ETN (NYSEArca: JJN) tracks nickel futures contracts and is down 24.9% over the past year
“Supplies of many commodities are rising, while demand, especially in China, remains weak,” Paul Christopher, chief international strategist at Wells Fargo Advisors LLC, said in the article. “We remain underweight on commodities.”
For more information on commodities, visit our commodity ETFs category.
Max Chen contributed to this article.