Barclays started these ETNs to compete with the Deutsche Bank Commodity Index Tracking Fund (DBC - commentary - Cramer's Take), so the question then is if there are any differences between the three.
The Deutsche Bank fund has 55% of its assets in energy, compared with 75% for the iPath GSCI and 30% for the iPath DJ-AIG ETN.
The DJ-AIG ETN has a higher weighting in agricultural, or soft, commodities at 31%, compared with 22.5% for Deutsche Bank and 11% for the GSCI ETN.
It's easier to capture moves in energy with energy stocks. Finding stocks that narrowly capture soft commodity price movements is much more difficult, so the iPath DJ-AIG ETN is potentially useful.
A diversified portfolio should have some exposure to commodities. At times, like now, this asset class may be tougher to own, but some weighting should be maintained. I'd give the iPath ETNs some time to prove themselves, but they could be a good way to go.
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