Commodity prices surged due to a confluence of factors: rising inflation, post-pandemic politics and Russia’s invasion of Ukraine. For many advisors, this has highlighted the often overlooked asset class of commodities.
In the next webcast, Inflation, Supply Chains, War: What Moves Commodity Markets?, Kathy Kriskey, Product Strategist, Commodities and Alternatives ETFs, Invesco; and Jason Bloom, Head of Fixed and Alternative Income ETF Product Strategy, Invesco, will unravel complex commodity markets and explore the benefits of portfolio exposure to this asset class.
For example, the Invesco DB Commodity Index Tracking Fund (DBC) seeks to replicate the excess return of the DBIQ Optimum Yield Diversified Commodity Index plus interest income from the fund’s holdings primarily of US Treasury securities and money market income less fund expenses.
The fund is aimed at investors looking for a profitable and convenient way to invest in commodity futures. The index is comprised of futures contracts on 14 of the world’s most traded and largest physical commodities.
Moreover, the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (NasdaqGM: PDBC) is a popular and actively managed commodity ETF. PDBC tries to negate the negative effects of contango in the commodity market by selecting futures contracts with the highest implied yield.
PDBC invests in commodity futures and other financial instruments that provide economic exposure to a diverse group of the world’s most traded commodities. The fund seeks to provide long-term capital appreciation by utilizing an investment strategy designed to exceed the performance of the DBIQ Optimum Yield Diversified Commodity Index Excess Return Index, an index comprised of futures contracts on 14 heavily weighted commodities. traded in the energy, precious metals, industrial metals and agriculture sectors.
For a more targeted game, the Invesco DB Agricultural Fund (DBA) is a combination of futures in several areas of agriculture, including wheat, soybeans, coffee, corn, livestock, cocoa, sugar, pigs and cotton. It’s a smart game for investors who believe commodity prices are weak.
Additionally, the recent launch Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT) is the first fund to offer access to the upstream themes of the electric vehicle transition by offering exposure to the raw materials essential to the production of electric vehicles. EVMT will invest in derivatives and other related financial instruments to gain exposure to metals critical to the production of electric vehicles. These metals currently include aluminum, cobalt, copper, iron ore, nickel and zinc.
Financial advisors interested in learning more about the commodities market can register for the Wednesday, May 4 webcast here.