Top 10 Commodity Producer ETFs

NEW YORK ( ETF Digest) -- Commodity-based companies and associated ETFs are critically important as a gauge of economic health and demand, inflation and should be important additions to most 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. Even if underlying commodity prices rise, commodity-related common stocks and linked ETFs may or may not follow suit. This makes investment timing that much more important.

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.

ETF Digest members 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.

#10: First Trust Global Copper ETF (CU)

CU follows the ISE Global Copper Index which is a linear weighted index following public companies in the copper mining industry based on analysis of revenue derived from the sale of copper. The fund was launched in March 2010. The expense ratio is .70%. AUM equal $59 million and average daily trading volume is 24K shares. As of early March 2012 the annual dividend yield was 4.20% and YTD return was 12.97%. The one year return was -12.30% which makes for a year of zero returns.

Data as of First Quarter 2012

CU Top Ten Holdings & Weightings
  1. Rio Tinto PLC ADR (RIO): 6.52%
  2. Freeport-McMoRan Copper & Gold B (FCX): 6.41%
  3. First Quantum Minerals Ltd. (FM): 6.00%
  4. Southern Copper Corporation (SCCO): 5.99%
  5. Xstrata PLC (XTA): 5.90%
  6. Antofagasta PLC (ANTO): 5.85%
  7. Kazakhmys PLC (KAZ): 5.05%
  8. MMC Norilsk Nickel JSC ADR (NILSY): 4.93%
  9. KGHM Polska Miedz SA (KGH): 4.86%
  10. Vedanta Resources PLC (VED): 4.51%

#9: Guggenheim Timber ETF (CUT)

CUT which follows the Beacon Global Timber Index consisting of companies who own or lease forested land and harvest timber for commercial use of wood-based products including paper, packaging, lumber and pulp. The fund was launched in November 2009.

The expense ratio is .65%. AUM equal $133 million and average daily trading volume is 140K shares. As of early March 2012 the annual dividend yield was 1.57% and YTD return was 3.97%. The one year return was 2.02%.

Data as of First Quarter 2012

CUT Top Ten Holdings & Weightings
  1. Stora Enso Oyj: 5.10%
  2. UPM-Kymmene Oyj (UPMKF): 4.94%
  3. International Paper Co. (IP): 4.85%
  4. Domtar Corp (UFS): 4.85%
  5. Svenska Cellulosa AB (SCA B): 4.78%
  6. Weyerhaeuser Co (WY): 4.78%
  7. Fibria Celulose SA ADR (FBR): 4.74%
  8. Smurfit Kappa Group PLC (SK3): 4.48%
  9. Greif, Inc. A (GEF): 4.43%
  10. West Fraser Timber (WFT): 4.31%

#8: iShares Global Timber & Forestry ETF (WOOD)

WOOD follows the S&P Global Timber & Forestry Index which includes companies primarily engaged in ownership, management or upstream supply chain of forests and timberlands. The fund was launched in June 2008.

The expense ratio is .48%. AUM equal $159 million and average daily trading volume is 21K shares. As of early March 2012 the annual dividend yield was 2.21% and YTD return was 12.05%. The one year return was -8.55%.

Data as of First Quarter 2012

WOOD Top Ten Holdings & Weightings
  1. Weyerhaeuser Co (WY): 9.45%
  2. Rayonier, Inc. (RYN): 8.28%
  3. Plum Creek Timber Co Inc (PCL): 7.81%
  4. Svenska Cellulosa (SCA B): 5.58%
  5. International Paper Co. (IP): 5.24%
  6. Stora Enso Corporation (STERV): 5.13%
  7. West Fraser Timber (WFT): 4.95%
  8. UPM-Kymmene Corporation (UPMKF): 4.82%
  9. MeadWestvaco Corporation (MWV): 4.47%
  10. Fibria Celulose SA ADR (FBR): 4.39%

#7: Van Eck Hard Assets Producers ETF (HAP)

HAP follows the Van Eck Hard Assets Producers Index which consists of companies engaged in the discovery, production and distribution of hard assets and related products. The fund was launched in August 2008.

The expense ratio is .49%. AUM equal $180 million and average daily trading volume is 50K shares. As of early March 2012 the annual dividend yield was 1.78% and YTD return was 9.58%. The one year return was -4.63%.

Data as of First Quarter 2012

HAP Top Ten Holdings & Weightings
  1. Exxon Mobil Corporation (XOM): 5.49%
  2. Monsanto Company (MON): 4.61%
  3. Potash Corporation of Saskatchewan, Inc. (POT): 4.19%
  4. Deere & Co (DE): 3.71%
  5. Syngenta AG (SYENF): 3.03%
  6. Chevron Corp (CVX): 2.79%
  7. BHP Billiton Ltd (BHPLF): 2.25%
  8. Archer-Daniels Midland Company (ADM): 2.01%
  9. BP PLC (BP.): 1.97%
  10. Mosaic Co (MOS): 1.75%

#6: Van Eck Agribusiness ETF (MOO)

MOO follows the DAXglobal Agribusiness Index which consists of companies that derive at least 50% of their revenues from the business of agriculture. The fund was launched in August 2007.

The expense ratio is .56%. AUM equal $5.9 billion with average daily trading volume of 700K shares. As of early March 2012 the annual dividend yield was .58% and YTD return was 10.33%. The one year return was -1.01%.

Data as of First Quarter 2012

MOO Top Ten Holdings & Weightings
  1. Monsanto Company (MON): 8.73%
  2. Potash Corporation of Saskatchewan, Inc. (POT): 7.92%
  3. Deere & Co (DE): 7.24%
  4. Syngenta AG (SYENF): 6.39%
  5. Wilmar International Ltd (F34): 6.10%
  6. Archer-Daniels Midland Company (ADM): 4.63%
  7. Mosaic Co (MOS): 4.57%
  8. BRF - Brasil Foods SA ADR (BRFS): 4.17%
  9. Agrium Inc (AGU): 4.01%
  10. Yara International ASA (YAR): 3.78%

#5: SPDR Metals & Mining ETF (XME)

XME follows the S&P Metals & Mining Select Industry Index which includes the metals and mining sub-sector of the S&P TMI index. The fund was launched in June 2006. The expense ratio is .35%. AUM equal $655 million and average daily trading volume is 2.7M shares. As of early March 2012 the annual dividend yield was .95% and YTD return was .80%. The one year return was -28.35%.

An alternative choice given similar trending characteristics is the Van Eck Steel ETF (SLX) which follows the NYSE Arca Steel Index featuring companies primarily involved in the production, manufacturing, fabrication and extraction of iron ore. The fund was launched in October 2006. The expense ratio is .55%. AUM equal $160 million and average daily trading volume is 93K shares As of early March 2012 the annual dividend yield was 2.16% and YTD return was 11.19%. The one year return was -21.59%.

Data as of First Quarter 2012

XME Top Ten Holdings & Weightings
  1. Stillwater Mining Company (SWC): 3.53%
  2. McEwen Mining Inc (MUX): 3.47%
  3. Steel Dynamics Inc (STLD): 3.33%
  4. Reliance Steel and Aluminum (RS): 3.25%
  5. Nucor Corp. (NUE): 3.20%
  6. Freeport-McMoRan Copper & Gold B (FCX): 3.20%
  7. Allied Nevada Gold Corp (ANV): 3.16%
  8. Alcoa Inc (AA): 3.15%
  9. United States Steel Corporation (X): 2.95%
  10. Compass Minerals International, Inc. (CMP): 2.92%

#4: First Trust Natural Gas Sector ETF (FCG)

FCG follows the ISE-Revere Natural Gas Index which is an equal-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the exploration and production of natural gas. The fund was launched in May 2007.

The expense ratio is .60%. AUM equal $335 million and average daily trading volume is 342K shares. As of early March 2012 the annual dividend yield was .41% and YTD return was 2.97%. The one year return was -10.17%.

Data as of First Quarter 2012

FCG Top Ten Holdings & Weightings
  1. Murphy Oil Corporation (MUR): 3.99%
  2. Stone Energy Corporation (SGY): 3.94%
  3. Noble Energy Inc (NBL): 3.85%
  4. Exxon Mobil Corporation (XOM): 3.76%
  5. EOG Resources (EOG): 3.74%
  6. SandRidge Energy Inc (SD): 3.72%
  7. Apache Corporation (APA): 3.71%
  8. Questar Corp (STR): 3.68%
  9. Anadarko Petroleum Corp (APC): 3.68%
  10. Encana Corp (ECA): 3.65%

#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 billion and average daily trading volume is 12 million shares. As of early March 2012 the annual dividend yield was .28% and YTD return was 3.52%. The one year return was -6.05%.

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.

Data as of First Quarter 2012

GDX Top Ten Holdings & Weightings
  1. Barrick Gold Corporation (ABX): 15.92%
  2. Goldcorp, Inc. (GG): 12.55%
  3. Newmont Mining Corporation (NEM): 9.77%
  4. AngloGold Ashanti Limited ADR (AU): 5.74%
  5. Silver Wheaton Corporation (SLW): 5.02%
  6. Yamana Gold, Inc. (AUY): 4.98%
  7. Buenaventura Mining Company Inc. ADR (BVN): 4.92%
  8. Randgold Resources, Ltd. ADR (GOLD): 4.79%
  9. Gold Fields Ltd ADR (GFI): 4.66%
  10. Kinross Gold Corporation (KGC): 4.41%

#2: iShares 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 $1.9 billion and average daily trading volume is 237K shares. As of early March 2012 the annual dividend yield was 1.10% and YTD return was 8.34%. The one year return was -4.08%.

Data as of First Quarter 2012

IGE Top Ten Holdings & Weightings
  1. Exxon Mobil Corporation (XOM): 7.47%
  2. Chevron Corp (CVX): 7.36%
  3. Schlumberger NV (SLB): 5.46%
  4. ConocoPhillips (COP): 5.33%
  5. Occidental Petroleum Corporation (OXY): 4.44%
  6. Suncor Energy Inc (SU): 2.97%
  7. Barrick Gold Corporation (ABX): 2.50%
  8. Anadarko Petroleum Corp (APC): 2.20%
  9. Apache Corporation (APA): 2.17%
  10. Canadian Natural Resources Ltd (CNQ): 2.13%

#1: SPDR Select Sector Energy ETF (XLE)

XKE 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 .18%. AUM equal $8 billion and average daily trading volume is 14M shares. As of early March 2012 the annual dividend yield was 1.43% and YTD return was 7.32%. The one year return was 2.02%.

A long list of others in this category include: VDE, IXC, OIH, XOP, IYE, IEZ, IEO IXC, PXI, XES, RYE, PXE and many more.

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

Data as of First Quarter 2012

XLE Top Ten Holdings
  1. Exxon Mobil Corporation (XOM): 18.21%
  2. Chevron Corp (CVX): 14.45%
  3. Schlumberger NV (SLB): 7.07%
  4. ConocoPhillips (COP): 4.89%
  5. Occidental Petroleum Corporation (OXY): 4.81%
  6. Anadarko Petroleum Corp (APC): 3.17%
  7. Apache Corporation (APA): 3.11%
  8. National Oilwell Varco, Inc. (NOV): 2.89%
  9. Halliburton Company (HAL): 2.62%
  10. EOG Resources (EOG): 2.43%

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 support@ETFDigest.com 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

This sector overall responds to perceived and real economic conditions. Should investors sense an economic slowdown demand for base commodities will decline and so too will associated stocks. Conversely, should investors believe an economic expansion is underway then products and stocks should rally. Uniquely, the level of the U.S. dollar is also another important determinant as to price action given commodities overall are priced in dollars. A strong dollar in the current environment should mean a decline in commodity prices and vice versa. It's important to remember also when the overall stock market declines so too may this sector even if commodity prices are rising.

It's also important to remember that ETF sponsors have their own competitive business interests when issuing products which may not necessarily align with your investment needs. New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using technical indicators like DeMark and other indicators, take a free 14-day trial at ETF Digest. Follow us on Twitter and Facebook as well and join our group conversations.

The ETF Digest is long XLE, IXC and MOO in the featured ETFs.

 

(Source for data is from ETF sponsors and various ETF data providers)

 

More from ETFs

What Bad Weather? Kohl's Shares Spike as Same-Store Sales Jump

What Bad Weather? Kohl's Shares Spike as Same-Store Sales Jump

Listen: Here's What You Need To Know About ETFs Today (Hint: They're on Fire!)

Listen: Here's What You Need To Know About ETFs Today (Hint: They're on Fire!)

Bitcoin Today: Bears Rear Their Heads as Prices Continue Downward Spiral

Bitcoin Today: Bears Rear Their Heads as Prices Continue Downward Spiral

Cannabis Stocks Are Screaming Sells After Seeing This Deal: Doug Kass Insider

Cannabis Stocks Are Screaming Sells After Seeing This Deal: Doug Kass Insider

60 Seconds: What's the Difference Between an ETF and a Mutual Fund?

60 Seconds: What's the Difference Between an ETF and a Mutual Fund?