The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) provides broad-basket commodity exposure. While the fund can stand alone, it can also be used alongside other commodity ETFs.
PDBC can play an important role in portfolios, helping hedge against inflation and interest rate risk, as well as provide diversification benefits, among others. However, some investors may want to add exposure to other commodity ETFs to target specific commodities.
See more: Industry’s Largest Commodity ETF Celebrates 10th Birthday
3 Commodity ETFs to Complement PDBC
The Invesco Agriculture Commodity Strategy No K-1 ETF (PDBA) offers actively managed exposure to agricultural commodities. Like PDBC, PDBA bypasses the need for a K-1 tax form, making it an appealing offering for investors.
PDBA provides exposure to three categories of agriculture, including grains, softs, as well as meats.
The grains category includes wheat and corn, while soft commodities include cocoa, sugar, and coffee. Meats include live cattle, feeder cattle, and lean hogs. The fund has exposure to 11 different grains, soft commodities, and livestock in total.
The Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT) is an actively managed ETF that offers access to upstream electric vehicle transition themes by offering exposure to commodities critical to producing electric vehicles.
EVMT allows investors the ability to focus solely on industrial metals rather than a midstream investment in companies that manufacture batteries and electric vehicles. The active structure of the ETF gives it the potential to expand both the number and type of metals included in the ETF as electric vehicle production and technology evolve.
Finally, the Invesco DB Base Metals Fund (DBB) could complement PDBC for investors looking to get more exposure to base metals. Base metals include copper, aluminum, and zinc. While PDBC, PDBA, and EVMT are actively managed, DBB is passive.
There is more demand than supply right now for copper, aluminum, and zinc, potentially creating a compelling investment opportunity.
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