Many investors share the Malthusian view that...

“The power of population is so superior to the power of the Earth to produce subsistence for man that premature death must in some shape or other visit the human race". Thomas Malthus, 1798

Relating to commodity ETFs, I am wondering: Everything that sustains life – commodities, energy, arable land, and water – is potentially limited and therefore destined to push global thirst for life to the extreme. Today the market value of commodities is skidding downward, but because of growing populations and increasing demands for hard assets, the slide is only temporary.

The ultimate market consequences of expanding demands and diminishing supplies are increased prices. The long-term climb in commodity prices is evident in the CRB Spot Index of prices for 22 commodities, including oil and gas, gold and silver, wheat and corn, cattle and hogs, and coffee and sugar (iShares S&P GSCI Commodity-Indexed Trust ETF (Ticker: GSG) tracks the performance of 24 different commodities).

ETF Investors are on the lookout for megatrends like this. In fact, the entire edifice of Wall Street is based on long-term supply-and-demand equations. Investor interest in short-term goals, may account for current trends, but it is extended market growth that fuels economic trends.

Fortunately for the investor, we now have over 50 commodity ETFs that cover the spectrum of global demands. There are approximately 12 funds for oil and other forms of energy, an equal number for precious and industrial metals, and at least nine for agricultural products and services, and many others that fall under the heading of natural resources

The classical commodities for energy, metals, and agriculture have on the average increased in price during the last year by about 17%.

Performance measures for these can easily be found online such as at the ETF database.

The composite list of the most traded commodity ETFs is given below.

Not all commodity ETFs are created equal in quality, cost, or performance. In total, however, they represent a New Wave of investment opportunity that emerged with the inception of broad and focused ETFs.

In a later report I will isolate those ETFs that in my opinion offer the greatest possibilities for superior performance. Many should prove superior in performance to the usual market index, the S&P 500.

Most Active ETFs/ETNs - Broad Commodity:

                                                                         Agriculture:

                                                                            Energy

                                                                             Metals

                                                                                                                                           
                                                                              >> ETFs vs. ETNs  

The list would be more complete if it contained those ETFs that cover solar, wind, and water, as well as other “green” forms of energy production. Broad commodity demands are creating a multi-level market opportunity.

My next article will deal with the recent sell off in commodities and whether this is just a natural correction or the start of a down trend.

Set alert for my next article:

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