In terms of raw performance, no asset class has been more miserable than commodities.
Over the past five years, the GreenHaven Continuous Commodities Fund (GCC) has delivered an 8% loss, while the total U.S. stock market (VTI) has jumped 109% and the total U.S. bond market (BND) has gained 20.04%, not including income.
GCC is a broad proxy of commodities prices and contains a basket of 17 different commodities futures contracts that are equally weighted. Among GCC’s holdings are cotton, coffee, crude oil, precious metals and natural gas.
Other commodity linked ETFs like the iShares S&P GSCI Commodity Indexed Trust (GSG) have been hit harder because of larger market exposure to the lagging energy sector. Since 2009, GSG has collapsed 21% in value.
Investing in commodity linked equity sectors has been a far better way to play commodities without buying the physical goods.
The Materials Sector SPDR ETF (XLB) has gained 65% over the past five years while the Energy Sector SPDR ETF (XLE) has risen 54%.