Commodities: ETFs vs. Mutual Funds
NEW YORK (TheStreet) -- Both ETF issuers and mutual fund companies are vying for investors in commodities. Investors looking for exposure to the broad commodities sector can now choose from active or passive management and futures or equities-based strategies.
When comparing commodity ETFs and commodity mutual funds, the fundamental differences should certainly be considered. While ETFs trade throughout the trading day, mutual funds are generally priced just once. Passive ETF strategies are generally lower-priced than active mutual funds.
While an active trader should use ETFs to easily trade in and out of the commodities sector during trading sessions, long-term investors may prefer the oversight provided by mutual fund managers.
Equities-based commodity ETFs and mutual funds track the stocks of commodities producers. Rather than tracking the physical commodities themselves, these funds track companies that are involved in the commodities business.The Fidelity Global Commodities (FFGXC) mutual fund, Jefferies Global Commodity ETF (CRBQ) and Market Vectors Hard Assets Producers ETF (HAP) all track large, global, commodities producers. All three funds count Monsanto (MON), Exxon Mobil (XOM), Potash (POT), Syngenta and Chevron (CVX) among their top 10 holdings. While the three funds may share similar holdings, there are differences in fees, size and track record. HAP, launched in August of 2008, is the oldest of the bunch. Fidelity's FFGCX was introduced in March of 2009, while CRBQ recently began trading in September of 2009. CRBQ has an expense ratio of 0.65%, while HAP and FFGCX have expense ratios of 0.75% and 1.75% respectively. When it comes to concentration, the top 10 holdings in CRBQ, HAP and FFGCX account for 37%, 33% and 27% of those funds' assets respectively.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV