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Add Commodity Exposure With These ETFs

BALTIMORE ( Stockpickr) -- On Main Street, the word "investor" is often synonymous with stocks. That's because traditionally, stocks have been the most accessible asset class for retail investors looking to get growth in their portfolios. They're also among the easiest to understand -- much easier to grasp than complex instruments like derivatives or potentially math-driven investments like bonds.

But as the financial world evolves, Main Street is quickly finding out that there's another kind of asset worth owning -- one that's even easier to understand. I'm talking about commodities.

Simply put, commodities are products such as gold, oil and rice -- items that are universal regardless of who produces them, and for which the market is able to set a base price. While commodity markets are less familiar to your typical retail investor, they've been a critical element of the financial system in some form for thousands of years. And now, they're more easily accessible to individual investors than ever before.

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The flight from stocks that accompanied 2008's stock market crash brought a new level of awareness to commodity investments. Suddenly, investors were being told to buy gold, or to invest in oil -- investments that don't necessarily move in concert with stocks.

Now, with the popularity of exchange-traded funds, it's easier than ever to add commodity exposure to your portfolio.

A Continued Rally in Commodities for 2011

Adding commodity exposure to your portfolio is an excellent way to diversify your portfolio away from stock market risks. And now, with commodity indices such as the Thomson Reuters/Jefferies CRB Index sitting atop multiyear highs, it makes sense to take a look at commodities.

Commodities have had strong performance for a few reasons. A flood of new investor dollars into these instruments has created scarcity among commodity investors, and at the same time, long-term trends are suggesting that many commodities remain undervalued relative to their historic valuations. And now, with the economy rebounding, demand has also increased for many commodities.

These factors all point to a continued commodity rally in 2011. So where should you look to add commodity exposure to your portfolio? With that question in mind, here's a look at 4 commodity ETFs worth looking at.
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