Commodity ETFs vs Futures Four Months In by Attain Capital
If you’ve been paying attention to the futures markets recently, you know that crude oil has rallied. Not back to the $100 range, but a 20% bounce from its low. We’re certainly due to another Crude Oil post, but it seems our “How to Play a Bounce in Oil (Hint: Not $USO)” post seems to be playing out nicely. December WTI is up 6.09% YTD and the $USO ETF is only up 0.74% {Disclaimer: Past performance is not necessarily indicative of future results}. Nevertheless, here’s our monthly look at:
1. How the numerous commodity ETFs which have sprung onto the scene the past few years are tracking a simple strategy of just buying the December futures market of that commodity, under the theory that the ETF will have to roll their positions periodically throughout the year, and in doing so take on costs the simple strategy does not have.
2. How the passive investment strategy of being long commodities (either via futures or ETFs) compare to an active strategy going both long and short commodity markets via a professional commodity trading advisor (as tracked by the BarclayHedge Ag Trader Index).
(Performance as of 4/30/2015)
Commodity ETF Over/Under Performance 2015
| Commodity | Futures | ETF | Difference |
|---|---|---|---|
| Crude Oil | $CL_F 6.09% |
$USO 0.74% |
-5.35% font> |
| Brent Oil | $NBZ_F 6.48% |
$BNO 7.05% |
0.57% |
| Natural Gas | $NG_F -7.25% |
$UNG -8.87% |
-1.62% font> |
| Cocoa | $CC_F 2.07% |
$NIB 1.01% |
-1.05% font> |
| Coffee | $KC_F -18.73% |
$JO -22.21% |
-3.48% font> |
| Corn | $ZC_F -8.93% |
$CORN -11.67% |
-2.74% font> |
| Cotton | $CT_F 3.45% |
$BAL 11.61% |
8.16% |
| Live Cattle | $LE_F -2.73% |
$CATL -3.04% |
-0.31% font> |
| Lean Hogs | $LH_F -5.31% |
$HOGS -20.06% |
-14.75% font> |
| Sugar | $SB_F -13.21% |
$CANE -12.84% |
0.37% |
| Soybeans | $ZS_F -5.30% |
$SOYB -5.73% |
-0.43% font> |
| Wheat | $ZW_F -18.29% |
$WEAT -20.30% |
-2.02% font> |
| Average strong> | -7.03% strong> | -5.14% strong> | -1.89% strong> font> |
| Average without Hogs strong> | -5.84% strong> | -5.12% strong> | -0.72% strong> font> |
| Commodity Index $DBC | -0.87% font> | ||
| Long/Short Ag Trader CTAs | -0.02% |
(Disclaimer: Past performance is not necessarily indicative of future results)
(Disclaimer: Sugar uses the October contract, Soybeans the November contract.)
Long/Short Ag Trader CTA = Barclayhedge Ag Traders Index
