A Commodity Fund That's Lighter on Energy

Do we really need another broad-based commodity product like the GreenHaven Continuous Commodity Index Fund (GCC - commentary - Cramer's Take) that just listed a few days ago? Aren't there a bunch of funds just like it?

Not exactly.

There are other broad-based commodity products, and although their names all sound similar, there are some differences.

Here are the other players:

PowerShares DB Commodity Tracking Fund (DBC - commentary - Cramer's Take) is the most popular commodities fund, averaging just over 500,000 shares in volume per day. The target allocation of DBC is 35% light crude, 20% heating oil (so 55% total in energy), 12.50% aluminum, 11.25% each in corn and wheat and 10% in gold.

iPath DJ AIG Commodity Index Total Return (DJP - commentary - Cramer's Take) trades less, 190,000 shares a day on average, but it offers broader exposure with more balance across the various commodity complexes. Energy (spread across four products) is 36.49%, agriculture (seven products) is 34.08%, industrial metals (four products) 13.34%, precious metals (two products) comprise 9.15% and livestock (two products) is 6.95%.

iPath S&P GSCI Total Return Index ETN (GSP - commentary - Cramer's Take) is my least favorite, and the market seems to support me, as this is the least-traded fund in the space, with just 26,000 shares in daily volume. The problem is the 74% weight to energy, which makes it the least diversified product by a wide margin. Oil tends to face more political/terror risks than other commodities to have to deal with, and so GSP is potentially less reliable than the other products.

Elements Rogers International Commodity Index Total Return Index ETN (RJI - commentary - Cramer's Take) is a fairly new fund but is reasonably popular at 116,000 shares per day. It allocates 44% to energy (six products), 34.9% to agriculture including cattle (20 products) and 21.1% to metals both industrial and precious (10 products). RJI provides access to more commodities than the others, but again it is heavy in energy.

This is where the GreenHaven product comes in. It allocates 58.8% to agriculture (10 products), 23.5% to metals (four products) and only 17.6% to energy (three products). The big structural difference is that it equal-weights the 17 commodities held in the fund.

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At the time of publication, Nusbaum had no positions in securities mentioned, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.