Why Has This Commodities ETF Outperformed So Much?

Well, so far this year, SDCI is significantly outperforming plain vanilla beta commodity ETF peers by a pretty meaningful margin. Congrats on that. It's especially impressive given the chaos of tariffs and the geopolitical turmoil that's happening right now. What has contributed to SDCI's success, and how might investors use it inside their portfolios?

Well, SDCI is not an active fund, but it uses a systematic rules-based system. It rebalances every month. The goal there is to give investors exposure to commodities that may be a little off the beaten path. Just take cocoa, for example. It was up 300% last year. A lot of commodity funds either don't have an exposure to cocoa, or it's a very small exposure, where we equal weight the commodities we hold.

So we can have a more meaningful exposure to things like cocoa. This year, it's cattle. Everybody's seen beef prices are up, and that's because cattle herds are at a 70-year low. So we have exposure through those rules. We can kind of get into those commodities that you wouldn't expect.

The rules, what we look at, is we're looking at something that indicates to us low inventory. If inventories relative to demand, if inventory is low relative to demand, that commodity has a higher chance of outperforming over time. So SDCI, the way that investors can use it, is absolutely to use it as a core commodity holding, as your broad commodity allocation, a diversification strategy.

It was designed to give you strong correlation to the traditional commodity indices and be that broad commodity fund, but hopefully offer a little extra in terms of the system and the allocation to different commodities. We've seen that play out over the years, and the fund's been a performance leader, and we're very pleased with that.