What are Commodities Exchange Traded Funds?
Before we talk about Commodity ETFs, let’s get into what an ETF is. ETF stands for Exchange Traded Fund. An ETF is registered with the SEC as an investment company, and it shares trade on a stock exchange intraday like any other public company. The ETF is like a mutual fund in that its assets consist of a basket of stocks deposited by institutional investors. Their popularity has increased considerably over the last few years, in large part due to their low expenses and the ease with which you can buy and sell them. Commodities exchange traded funds, also known as commodity ETFs, are investment vehicles (asset backed bonds, fully collateralized) that track the performance of an underlying commodity index including total return indices based on a single commodity. Commodity ETFs invest in commodities, such as precious metals and futures, and are also sometimes referred to as ETCs, which stands for Exchange Traded Commodities. ETCs trade just like shares, are simple and efficient and pro
