This week, we are looking at the funds directly linked to commodity prices. The commodity-linked securities in this article can provide portfolio diversification uncorrelated to stock market holdings.

The fund listed as the best performer in the week ended Thursday, June 19, is the

DB Agriculture Long ETN

(AGF) - Get Report

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As an exchange-traded note, the shares trade throughout the day just like exchange-traded funds -- but the shares are of a senior unsecured debt obligation from

Deutsche Bank

(DB) - Get Report

linked to the Deutsche Bank Liquid Commodity Optimum Yield Agriculture Index.

As this illiquid ETN did not trade on June 11 or June 12, the return figure of 7.76% is calculated from the last trade on June 10 through the close on June 19. The fund's net-asset value movement of just 2.47% over the five trading days ending June 19 would not have made the top-10 list.

The Agriculture ETN is included in honor of the Midwestern corn, wheat and soybean farmers suffering from the floods.

The second fund on our best-performer list is the

iPath Dow Jones AIG Copper Total Return Sub Index ETN

(JJC) - Get Report

, up 6.88% for the week. iPath ETNs are

Barclays Bank PLC

(BCS) - Get Report

unsecured debt instruments.

In third place, the

DB Gold Double Long ETN

(DGP) - Get Report

shined with a 6.60% return. The corresponding Deutsche Bank Liquid Commodity Optimum Yield Gold Index reflects the underlying gold futures contract prices. The comparable spot gold price gained 3.49%.

The fourth- and fifth-place funds both focus on silver but differ dramatically in investment strategy. The

PowerShares DB Silver Fund

(DBS) - Get Report

, at 5.10%, did marginally better with its portfolio of silver futures contracts than the 4.91% return in iShares Silver Trust holding a bank vault full of silver bullion bars.

The worst performer this week, MACROshares Oil Down Tradeable Trust, was halved again, losing 55.56%. This time next week, it will be down 100% after the scheduled cease in trading on June 25. The fund currently has a net asset value of zero and is trading for a few cents a share in similar fashion to a well out-of-the-money put option.

If President Bush rescinds the executive order on U.S. coastal water oil drilling, OPEC increases production, and crude futures contract margin requirements worldwide are raised all triggering a drop in the price of oil below $120 per barrel from around $135 today, this Oil Down Trust would finish its life back in the black. Not likely.

The second-worst-performing fund this week is

iPath Dow Jones AIG Nickel Total Return Sub Index ETN

(JJN) - Get Report

down 8.89%. For the week, the spot price of nickel in London was dented by 10.07%, with the Dow Jones-AIG Nickel Total Return Sub-Index subtracting 9.35%.

Nickel, used to make stainless steel, is witnessing output in excess of demand by 13,700 metric tons, an eight-month high on the third consecutive month of contracting demand per the International Nickel Study Group.

Just as the double long gold ETN took the third best honors, the

DB Gold Double Short ETN

(DZZ) - Get Report

captured third worst, losing 6.17%. Gold has been range-bound between the $950 level per ounce on the high side and $850 level on the low since late March. The series pattern of lower highs needs to be broken to reverse the short-term downward trend.

Lastly, the

United States Heating Oil Fund LP


, off 6.03%, and its fellow list-mates, the

United States Gasoline Fund LP

(UGA) - Get Report

and the

United States Oil Fund LP

(USO) - Get Report

, advertise themselves as "a new way for investors and hedgers to manage their exposure to energy." The futures contracts held by these funds are not appropriate as individual holdings for most investors, but as a managed portfolio, may reduce some of the pain at the pump.

Unlike stocks, commodity investments generally rise with inflation. With the overall inflation rate at 4.2%, you may want to consider allocating a portion of your portfolio to these types of investments as you look to diversify.

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Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.