Commodities ETF Sidesteps the Hassles

The other quibble is the marketing effort that focuses on how the fund avoids the hassles of owning the actual commodities or proxies for the commodities. Clearly, any equity fund does this because equities aren't commodities. That pitch would make more sense if the Thomson-Reuters Jefferies Commodity Equity Index Fund were the first resources-oriented fund, but it's not -- not even close. Just about every big ETF provider has one or two funds in the space.

That being said, the fund offers promise as a proxy for materials and energy in a diversified portfolio. Both sectors are an easy place to add foreign exposure without a lot of Western Europe, which has a high correlation to the U.S., or Japan, which is light in resources stocks.

The energy industry comprises 12% of the S&P 500, while materials account for 3.5%. Given that the Thomson-Reuters Jefferies Commodity Equity Index Fund is 61% materials (versus 39% energy), a 10% portfolio weight would result in the portfolio having a 6% weighting to materials, a noticeable overweight versus the S&P 500. The resulting 4% portfolio weight in energy would likely require adding an additional energy fund or stock or both.

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