Commodities Come in Three Packages

NEW YORK (TheStreet) -- A few weeks ago, Jefferies launched the Thomson-Reuters Jefferies Commodity Equity Index Fund(CRBQ), which covers equities in commodity-related industries. As follow-ups, Jefferies put out funds that target specific slices of the original fund: Thomson-Reuters Jefferies Global Industrial Metals Equity Index Fund(CRBI) and Thomson-Reuters Jefferies Global Agriculture Equity Index Fund(CRBA).

Both groups, industrial metals and agriculture, have plenty of utility in a diversified portfolio for adding topical themes and the chance to participate in what some are calling an 18-year bear market for commodities. (Jim Rogers and David Rosenberg have made comments about very long cycles). Unfortunately, many other ETF providers came out with similar funds long ago.

For example, Van Eck has listed the Market Vectors Hard Asset Producer ETF(HAP), which looks similar to the Thomson-Reuters Jefferies Global Industrial Metals Equity Index Fund and the Market Vectors Agribusiness ETF(MOO), which has a lot of overlap with the Thomson-Reuters Jefferies Global Agriculture Equity Index Fund. There are quite a few other examples.

Neither seem to be meaningfully different from others in the space. Something in their favor is the somewhat unique exposure to Russia, with the 5.7% weight to Uralkali in the agriculture fund but the industrial metals fund appears to be a slightly different mix of the same mega-cap stocks like Anglo American(AAUKY), Vale(VALE) and Rio Tinto(RTP). It's quite clear that they can both serve as useful proxies for their respective industries, and that they are both heavy in foreign stocks is undoubtedly a plus.

There is a marketing angle here that I would be wary of. The fund provider is trumpeting both funds as being better than commodities because they're less complex and a company can continue to become increasingly profitable even if the commodity underlying the business of a particular stock doesn't rise.