Commodity ETFs
Commodity ETFs offer investors a way to purchase exposure to energy, precious metals, agricultural goods or a combination outside of the futures market. Commodities can help to diversify a traditional portfolio as they are generally less correlated to stocks and bonds. Commodity ETFs should not be confused with equity sector ETFs, which track the performance companies in a sector like oil and gas. Additionally, commodity ETFs may generate a K-1 tax form.
Leveraged and Inverse Commodity ETFs
ProShares leveraged and inverse commodity ETFs are tools to trade commodities and offer varying levels of exposure to crude oil, natural gas, gold and silver via futures-based indexes. Investors can use them to:
- Seek profit from changes in specific commodity futures prices through directional trades.
- Employ a short-term hedging strategy to offset losses in commodity holdings.
- Obtain higher levels of exposure to specific commodities while using less capital.
Investors using leveraged and inverse commodity ETFs should have a comprehensive understanding of their features, benefits and risks, a high risk tolerance and the ability to monitor their positions daily.
About the Bloomberg Gold Subindex
The Bloomberg Gold Subindex is a single-commodity index designed to reflect the performance of gold as measured by the price of COMEX gold futures contracts. To avoid the physical delivery of gold, the futures contracts in this subindex are rolled from current to subsequent contracts over a period of five business days in certain months, according to a predetermined schedule.
About the Bloomberg Silver Subindex
The Bloomberg Silver Subindex is a single-commodity index designed to reflect the performance of silver as measured by the price of COMEX silver futures contracts. To avoid the physical delivery of silver, the futures contracts in this subindex are rolled from current to subsequent contracts over a period of five business days in certain months, according to a predetermined schedule.