A commodity ETF is an exchange-traded fund (ETF) that is invested in a variety of physical commodities, including natural resources, agricultural goods, and precious metals.
The commodity ETF focuses on either a single commodity or is focused on investments in futures contracts.
An investor that purchases a commodity ETF usually does not own a physical asset, but instead they own a set of contracts backed by the commodity.
Commodity ETFs are popular because they offer investors exposure to commodities without having to learn how to purchase futures or other types of derivative products.
Popular types of commodities include precious metals, such as gold and silver, and oil and gas.
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