NEW YORK (TheStreet) -- Commodities like gold, oil and corn have struggled in 2014, especially in the past few months. But Joe Nelesen, director at iShares, said Monday investors should begin considering commodities as an investment in their portfolio.
Oil and gold are near five-year lows, he explained, and historically these assets tend to rebound in the future.
So do investors need to have a futures account with their broker in order to get exposure to these markets? Technically, that is an option. But Nelesen suggests using the iShares Commodities Select Strategy ETF (COMT) .
The fund uses a "diversified basket of commodities, futures, and equities," he said, adding, "We've found a solution that's good for most investors."
While the exchange-traded fund has direct exposure to commodities and futures contracts, it also has exposure to the companies that produce, mine or harvest them as well. It even has exposure to companies that benefit from lower input costs, like when oil or fertilizer is cheaper, he said.
The ETF's exposure to precious metal also goes further than gold, with holdings in silver, copper and other industrial metals, Nelesen added. This should benefit investors if inflation begins to move higher.
West Texas Intermediate is lower by 25% since its highs made in late-June. While production remains relatively high, a reduction in supply would boost oil prices, he concluded. That would bode well for the ETF.
-- Written by Bret Kenwell