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Commodities ETFs offer diversification and inflation offset
Commodities - MAY 3, 2022

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Commodities ETFs offer diversification and inflation offset

by Larry Gray

One asset class that has a track record of solid performance amid persistent inflation, as well as during times of global turmoil, is commodities. From metals to agricultural products to energy suppliers, commodities not only provide critical diversification to a mixed-asset portfolio, they have typically also seen their values increase during inflationary periods.

Commodity ETFs can provide exposure to this diverse asset class. These offerings include focused ETFs (e.g., gold, silver, energy) and diversified ETFs that offer a mixed portfolio of various commodity securities.

According to the Energy ETF Channel, there are 55 energy-focused ETFs traded on the U.S. markets. Energy ETFs have total assets under management of $84.34 billion. The average expense ratio is 0.68 percent.

Oil stocks, which produced a strong rally in 2021, continue to prosper in early 2022 from the imbalance between strong demand and current limited supply. Examples of energy ETFs include I

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