Prices of raw materials have surged from a confluence of factors: rising inflation, post-pandemic policy, and Russia’s invasion of Ukraine. For many advisors, that has brought the often-overlooked asset class of commodities into sharp relief.
In the upcoming webcast, Inflation, Supply Chains, War: What’s Moving Commodities Markets Now, Kathy Kriskey, Product Strategist, Commodities and Alternatives ETFs, Invesco; and Jason Bloom, Head of Fixed Income and Alternatives ETF Product Strategy, Invesco, will untangle the complex commodities markets and explore the benefits of adding portfolio exposure to this asset class.
For example, the Invesco DB Commodity Index Tracking Fund (DBC) seeks to track the DBIQ Optimum Yield Diversified Commodity Index Excess Return plus the interest income from the fund’s holdings of primarily US Treasury securities and money market income less the fund’s expenses.
The fund is for investors seeking a cost-effective and convenient way to invest in commodity futures. The index is composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world.
Additionally, the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (NasdaqGM: PDBC) is a popular, actively managed commodity ETF play. PDBC tries to negate the negative effects of contango in the commodities market by selecting futures contracts with the highest implied roll yield.
PDBC invests in commodity-linked futures and other financial instruments that provide economic exposure to a diverse group of the world’s most heavily traded commodities. The fund seeks to provide long-term capital appreciation using an investment strategy designed to exceed the performance of the DBIQ Optimum Yield Diversified Commodity Index Excess Return Index, an index composed of futures contracts on 14 heavily traded commodities across the energy, precious metals, industrial metals, and agriculture sectors.
For a more targeted play, the Invesco DB Agriculture Fund (DBA) is a combination of futures within several areas of agriculture, including wheat, soybeans, coffee, corn, cattle, cocoa, sugar, hogs, and cotton. It’s a smart play for investors who believe that soft commodity prices.
Additionally, the recently launched Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT) is the first fund to offer access to upstream electric vehicle transition themes by providing exposure to commodities critical to producing electric vehicles. EVMT will invest in derivatives and other financially linked instruments to gain exposure to metals critical to electric vehicle production. These metals currently include aluminum, cobalt, copper, iron ore, nickel, and zinc.
Financial advisors who are interested in learning more about the commodities market can register for the Wednesday, May 4 webcast here.