Persistent inflation and subsequent policy shifts from global central banks have raised the specter of recession over the U.S. economy. Commodities have historically performed well during recessions, however, and could give investors an anchor in worst-case scenarios. Beyond that, the asset class also has strong long-term fundamentals, as raw material demand has surged due to the green energy transition.
In the upcoming webcast, Commodities: A Bright Spot in Recession Darkness, Steven Dunn, head of exchange traded funds at abrdn, and Robert Minter, director of ETF investment strategy at abrdn, will answer key questions about commodities in the current and future market environment.
Investors interested in diversifying their portfolios with broader commodities exposure now have several ETF options available to them. For example, abrdn offers a line of ETFs to outperform the widely observed Bloomberg Commodity Indices, all without worrying about troublesome K-1 forms come tax season. These funds include the actively managed abrdn Bloomberg All Commodity Strategy K-1 Free ETF (NYSEArca: BCI) and the abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (NYSEArca: BCD).
BCI tries to provide long-term capital appreciation that exceeds the performance of the Bloomberg Commodities Index. It may not invest in all the components of the benchmark, but it will hold similar interests to those included in the index, along with short-term investment-grade fixed income securities, money market instruments, certain bank instruments, and cash or other cash alternatives. The underlying Bloomberg Commodities Index tracks the price of rolling positions in a basket of commodity futures with a maturity between one and three months.
BCD tries to provide long-term capital appreciation that exceeds the performance of the Bloomberg All Commodity Index 3 Month Forward Index, which tracks movements in the price of rolling positions in a basket of commodity futures with a longer maturity of between four and six months.
Additionally, the abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF (BCIM) offers exposure to the more targeted industrials metals segment. BCIM seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Bloomberg Industrial Metals Total Return Subindex. The Index consists of four commodities futures contracts concerning aluminum, copper, nickel, and zinc.
Financial advisors who are interested in learning more about the commodities market can register for the Thursday, September 1 webcast here.