Best Commodities ETFs for Q2 2022: Which One to Buy


Triston Martin

Nov 09, 2023

Exchange-traded funds, often known as ETFs, have broadened the pool of investors who may now participate in the commodity market. Investing in commodities may be a way to protect oneself against the effects of inflation while also contributing to a more diversified financial portfolio. As a result, precious metals such as silver and palladium are seen as safe havens in uncertain market situations. On the other hand, the demand for copper may expand soon as a result of an increase in the number of activities related to manufacturing and construction. Investing in an exchange-traded fund (ETF) is a way to get exposure to a certain commodity without directly undertaking the risks associated with doing so. Let us see what are the best commodities ETFs for q2 2022.

BDRY (Breakwave Dry Bulk Shipping) ETF

For trading on the futures and commodities markets, BDRY has been set up as a commodity pool, a private investment organization that pools the contributions of investors. Investing in the dry bulk shipping business is a critical component of global commodities markets. Investment in dry bulk freight may be unlevered without needing a futures account by using BDRY's daily price movements for near-dated dry bulk freight futures. BDRY offers long-term exposure via a diversified portfolio of freight futures contracts with short expiration dates. Rolling contracts are minimized by the fund's laddering structure. During this time, it buys new contracts while allowing old positions to expire and settle for cash. Most of the fund's assets are freight futures with an average maturity of three months.

GRN (iPath Series B Carbon) ETN

GRN is the name of an exchange-traded note (ETN) that tracks the BGC (Barclays Global Carbon) II TR USD Index. It provides exposure to carbon prices as dignified by upcoming contracts on CEC (carbon emissions credits) from the EU Emissions Trading System and the Clean Progress Mechanism of the Kyoto Protocol. In this sense, there is a significant relationship between GRN and the phenomenon of global warming. The bulk of the assets in GRN's portfolio comprises futures contracts on carbon emissions credit issued by the European Union. These contracts are traded on the Intercontinental Platform (ICE) Futures Europe market.

KRBN (KraneShares Global Carbon Strategy) ETF

KRBN offers coverage of cap and trade carbon allowances by monitoring the Global Carbon Index published by IHS Markit. This coverage is achieved by following the most actively traded carbon credit futures contracts. The index takes into account trade-and-cap systems that are in place in both Europe and North America. These systems include the EUA (European Union Allowances), the RGGI (Regional Greenhouse Gas Initiative), and the CCA (California Carbon Allowances). The fund claims that it has developed a new gauge that enables risk hedging and going long on the carbon price while simultaneously promoting ethical investing. KRBN stands to gain from both the rising price of carbon emissions and the tightening regulations on emissions. Futures contracts on carbon emissions credit make up the vast bulk of KRBN's assets, just as they do for GRN's portfolio.

Arrow Reverse Cap 500 Exchange-Traded Fund (YPS)

Market capitalization (cap) weighted S&P 500 index is a well-known free-floating index. Thus, "The S&P 500's largest firms account for a substantial portion of its whole market value." Companies such as Apple, Microsoft,, Alphabet, and Tesla are most at risk. According to the SPDR S&P 500 ETF Trust, the most popular index-based ETF, around 30 percent of its holdings are in the top 10 companies in the S&P 500 index.

The ETF on this list is the Arrow Reverse Cap 500 ETF. An alternative to the S&P 500 index may interest investors who wish to avoid the large-cap S&P 500 index participants. Many large-cap firms are overlooked by YPS, which concentrates on the smaller ones. The fund went public for the first time in October 2017. The Reverse Cap Weighted Large Cap US Index serves as the foundation for the YPS index. Consumer discretionary contributes 17.1% of the total, as do industrials (15.7%), information technology (12.8%), financial companies (11.9%), healthcare (10.3%), and telecommunications services (7.1%).


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