ETF Asset Class: Commodity
Most people are familiar with stocks and bonds, but commodity ETFs are a less common investment. A commodity ETF is a fund that tracks a commodity index, or a basket of commodities. Commodities are raw materials like oil, gold, silver, and copper. They're considered essential assets because they're used in a wide variety of industries. Many commodity ETFs track the Bloomberg Commodity Index, which includes 22 commodity futures contracts. This diversification helps to reduce risk. When investing in commodity ETFs, it's important to pay attention to the fees and expenses. Some funds charge high fees, which can eat into your profits.