For Commodities Exposure, It's CPEs to the Rescue

By Salvatore Bruno via

Back in early January, our team at IndexIQ outlined our top-five ETF-focused trends and insights for the coming year. I’m happy to report that, while no forecast is perfect, we were pretty spot-on regarding commodities.

At the time, we stated that we expected investors to continue to shift assets back into commodities due to factors such as a weaker dollar (which was already helping to drive up strong commodity returns) and the need to seek growth through an increasingly diversified portfolio. All the indicators were there, and while we were pretty good at seeing down the pipeline to understand why commodities would likely make sense—which has indeed caused the asset shift we expected—what we didn’t anticipate was precisely how investors would make the move.

Now, mid-way through Q2, the picture seems pretty clear: more and more, investors are turning to Commodity Producing Equities (CPEs). Why? Here’s a snapshot of the top three reasons CPEs make a whole lot of sense:

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