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Top Commodities To Invest In 2018

Smith Pete



Most investors shy away from investing in individual commodities. However, what they do is that they do mostly get commodity ETFs, which kind of secures their investments.

If you are looking to invest in commodities, I think it is preferable to first know what is going on in the respective market first.

Whether you are looking at individual commodities or commodity ETFs, here are the top commodities to invest in 2018.

Top commodities to invest in 2018

Top commodities to invest in 2018

Invesco DB Commodity Tracking (DBC)

Issued by Invesco PowerShares, the average volume of Invesco DBC is 2,383,626. Their net assets are worth $2.49 billion, with a 4.64% 2018-YTD Return. Their expense ratio is 0.86%.

In terms of assets under management, DBC is the largest ETF. It tracks a total index of 14 commodities and uses future contracts.

Their annual 1-year, 3-year and 5-year annualised returns are 15.10%, 3.47% and -8.20% respectively. The change in annual returns shows that the commodity market is definitely volatile.

However, DBC is quite worthwhile and one of the top commodities to invest in 2018.

Broad Commodity And Soft Commodities

Broad commodities and soft commodities are both good choices when it comes to commodity investments.

Some investors choose one or two commodities than going for the broader basket of commodities. Both make top commodities to invest in 2018.

According to a Bears Traps Report by McDonald, it is suitable to go for agricultural or soft commodities.

Amongst these are different options you can go for.

Say, Mosaic (MOS).

A publicly traded company, Mosaic sells fertilisers. When crop prices increase, farmers get more fertilisers in order maximise crop yields.

The iPath Bloomberg Grains Subindex Total Return SM ETN (JJG) invests in five grains including soybean oil, soybean meals, wheat, corn ad soybeans.

Or, there is even a choice of investing in a broader basket of ‘soft commodities’ through PowerShares DB Agriculture Fund. This includes cocoa, cattle, sugar and other commodities.

Liquefied Natural Gas

If we are talking about the top commodities to invest in 2018, natural gas  is a good choice.

Natural gas is cheap in US or say, relatively cheap. However, across the globe, it is at least 2-3 times higher including Asia.

Moreover, if we are talking about LNG, Tellurian is a viable choice.

A small-cap LNG start up, LNG makes a viable choice of investment. Led by Charif Souki, this small-cap LNG start up was founded by Cheniere Energy, a giant in the business.

Nonetheless, LNG is a worthwhile commodity with great prospects.

Gold and Silver

Gold and silver both are good commodity investments. The metal, gold, is a classic hedge against inflation as investors hold it as a measure of storing value.

While gold will get a boost and support from emerging markets economic strength because that drives gold prices up.

To get exposed to gold through ETF, you can choose iShares Gold Trust or other similar ETFs that get you access to gold but with that, a lot more too.

However, some experts say that rather than gold, silver is also a good choice. Gold trades to a bigger premium to silver. The gap between gold and silver both is quite wide spread.

Silver is relatively cheap and therefore, better against the global economic backdrop. Therefore, one of the top commodities to invest in 2018.

Moreover, if you are looking to get exposure to IAU gold ETF, choosing iShares Silver Trust (SLV), Pelaez or SSR Mining (SSRM) are better choices. They have diversified asset bases in Argentina, Canada and US.

Furthermore, other than these three, you can also divert your attention copper, oil, natural gas, sand and lumber.

2018 is a tricky year and it is better to protect yourself.

If you want to find out where to go with commodity investments, the aforementioned top commodities to invest in 2018 make decent choices.

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