Larry Berman CFA, CMT, CTA
iShares Broad Commodity ETF
CBR-T
DON'T BUY
Mar 11, 2013
All of these ETFs that have commodity futures in them have some issues. They try to mitigate them by not holding the front month and back month contracts. But they still have some contango. You can get up to a 6% drag from the rollover of futures contracts so unless you have robust growth in commodities, that drag will hurt performance. For the next 2-3 years he thinks we will not have such robust growth in commodities.
Broad Commodity ETF. There are very few things where you can get real, true, broad commodity exposure to sugar, wheat, soybeans, etc. Really great way if you believe in the long-term growth thesis. This would be a long-term hold. Think of it as a core holding with 5%-10% of your portfolio.
(A Top Pick Nov 23/10. Up 12.32%.) Broad commodities ETF. This is the best way to play commodities in Canada. Costs a bit more than others but more diversified than any of the others and therefore safer.
(Top Pick Dec 29/10, Down 0.75 %) Still the only fantastic commodity product in the Canadian Market place. This is a broad commodity ETF. About 24 commodities.
Broad Commodity ETF. He includes this in some of his more aggressive portfolios. Likes the product and the fact that it is global and commodity-based. Tends to be bullish on commodities right now.
Make fracking sand. Rough year. Chinese imported synthetic fracking sand but now realize it is a lower quality and are moving back. 16x earnings. Nat Gas will be favourable now that Obama won election.
Commodities have really underperformed and this is exactly why he is talking about this. Believes in this as being a long-term Hold. In the long-term he thinks commodities are going to do very well.
All of these ETFs that have commodity futures in them have some issues. They try to mitigate them by not holding the front month and back month contracts. But they still have some contango. You can get up to a 6% drag from the rollover of futures contracts so unless you have robust growth in commodities, that drag will hurt performance. For the next 2-3 years he thinks we will not have such robust growth in commodities.