GDXJ tracks small- and mid-cap companies involved in gold and/or silver mining. GDX provides exposure to worldwide companies that are involved primarily in mining for gold, including large-, mid-, and small-cap stocks.

Further, equity-based commodity ETFs have better tax implications than ETFs that hold physical stockpiles of precious metals.įor example, investors looking to gain exposure to gold can find equity-based alternatives such as VenEck Gold Miners ETF ( ) and VanEck Junior Gold Miners ETF ( ).

These equity funds are viable alternatives to futures-backed ETFs, which may be subject to trading limits and other regulatory restrictions. An equity-based commodity ETF offers 'leverage-like' exposure to commodities through the stocks of companies involved in natural resources and other raw materials. In order to make the best choice to fit your portfolio, you must mine the options and see where and how you can pursue pay dirt.Īnother way to gain exposure to commodities is through the companies that produce, transport, and store them. Just because a fund's name includes 'oil,' 'natural gas,' 'gold,' etc., you can't be sure how that fund accomplishes exposure to that particular commodity. Does the ETF hold the physical commodity, or does it use futures contracts to replicate exposure? Does it hold equities of companies that are engaged in the production of a particular commodity? Your investment decision needs to be based on far more than just the name of the ETF.

As you contemplate which fund is right for your portfolio, you need to be particularly discerning about a fund's objective and how it pursues that goal. In the commodity space, there are 4 basic ways to gain exposure:Įach of these varieties has advantages and drawbacks. Interest in commodity-based ETFs has exploded and shows little sign of abating.

Ishare commodity etf