Top 10 Commodity Producers ETFs

TOP 10 COMMODITY PRODUCERS ETFS

Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

Commodity-based companies and associated ETFs are critically important as a gauge of economic health and demand, inflation and are also critical additions to investment portfolios. Underlying commodity prices can be affected by many factors including the level of the U.S. dollar which can depress prices when strong. With inflation pressures waxing and waning many believe it's important to have exposure to commodity oriented stocks and ETFs.

There are many ETF choices from which to choose. We've cobbled some good choices together and where repetitive choices exist we've paired some together with similarities just too hard to ignore.

We rank the top 10 ETF by our proprietary stars system as outlined below. If an ETF you're interested in is not included but you'd like to know a ranking send an inquiry to [e-mail] and we'll attempt to satisfy your interest.

 

Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity

Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity

Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity

Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

 

#1: SPDR Energy Select Sector ETF (XLE)

XLE follows the Energy Select Sector Index which includes companies in oil, gas, consumable fuels and energy equipment and services. The fund was launched in December 1998. The expense ratio is .20%. AUM equal $7.3 billion and average daily trading volume is 22M shares. As of mid-December 2011 the annual dividend yield was 1.57% and YTD return was 3.97%.

Both ProShares and Direxion shares have inverse and leveraged products available.

XLE Top Ten Holdings & Weightings

Data as of December, 2011

1. Exxon Mobil Corporation (XOM): 17.96%
2. Chevron Corp (CVX): 14.31%
3. Schlumberger NV (SLB): 7.22%
4. ConocoPhillips (COP): 4.92%
5. Occidental Petroleum Corporation (OXY): 4.77%
6. Anadarko Petroleum Corp (APC): 3.21%
7. Apache Corporation (APA): 3.00%
8. Halliburton Company (HAL): 2.76%
9. National Oilwell Varco, Inc. (NOV): 2.62%
10. EOG Resources (EOG): 2.31%

#2: iShares S&P Natural Resources ETF (IGE)

IGE follows the S&P North American Natural Resources Sector Index which measures the performance of U.S.-traded natural resource related stocks. The fund was launched in October 2001. The expense ratio is .48%. AUM equal $1.8 billion and average daily trading volume is 357K shares. As of mid-December 2011 the annual dividend yield was 1.78% and YTD return was -4.92%.

IGE Top Ten Holdings & Weightings

Data as of December, 2011

1. Chevron Corp (CVX): 8.27%
2. Exxon Mobil Corporation (XOM): 8.00%
3. Schlumberger NV (SLB): 5.52%
4. ConocoPhillips (COP): 5.31%
5. Occidental Petroleum Corporation (OXY): 4.36%
6. Barrick Gold Corporation (ABX): 2.87%
7. Suncor Energy Inc (SU): 2.56%
8. Goldcorp, Inc. (GG): 2.35%
9. Canadian Natural Resources Ltd (CNQ): 2.22%
10. Anadarko Petroleum Corp (APC): 2.20%

 #3: Van Eck Market Vectors Gold Miners ETF (GDX)

GDX follows the NYSE Arca Gold Miners Index which provides exposure to publicly traded companies worldwide involved primarily in the mining for gold, representing a diversified blend of small-, mid- and large- capitalization stocks. The fund was launched in May 2006. The expense ratio is .53%. AUM equal $7.8 billion and average daily trading volume is 14 million shares. As of mid-December 2011 the annual dividend was .69% and YTD return was -5.92%.

Newer ETFs in the sector include GDXJ (Van Eck Junior Miners ETF) and SIL (Global X Silver Miners ETF). Both are interesting but need just a little more seasoning.

GDX Top Ten Holdings & Weightings

Data as of December, 2011

1. Barrick Gold Corporation (ABX): 16.35%
2. Goldcorp, Inc. (GG): 13.21%
3. Newmont Mining Corporation (NEM): 10.76%
4. AngloGold Ashanti Limited ADR (AU): 5.79%
5. Kinross Gold Corporation (KGC): 5.41%
6. Gold Fields Ltd ADR (GFI): 4.95%
7. Randgold Resources, Ltd. ADR (GOLD): 4.55%
8. Yamana Gold, Inc. (AUY): 4.50%
9. Eldorado Gold Corp (EGO): 4.48%
10. Buenaventura Mining Company Inc. ADR (BVN): 4.46%

 

 

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