Saturday, October 9, 2010

Inside 5 Surging Commodity ETFs

Despite the advice of some in the financial media, many investors have continued to embrace exchange-traded commodity products as efficient vehicles for establishing exposure to natural resources. Cash continues to flow into commodity ETFs, which are popular as both diversifying agents within buy-and-hold portfolios and tools for speculating on short-term price movements among more active traders. Regardless of the underlying resource or the strategy implemented, the last few weeks have been very good to commodity ETF investors.

A weakening U.S. dollar and improving outlook for global equity markets have combined to send prices of many natural resources higher. And while correlations between commodity prices and equities have undoubtedly increased in recent years, several have demonstrated exactly why many investors see this asset class as a valuable addition to stock-and-bond portfolios. While nearly every commodity product has gained ground over the last month, some have delivered particularly big gains. Below, we profile five commodity ETFs that have surged since the beginning of September, taking a look under the hood of each fund and examining some of the factors responsible for their impressive rallies. (more)

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