Commodities are on a roll – buy in with this cheap ETF

Profiting from raw materials isn’t as easy as you might think. A new ETF, however, is worth a look

Mining dump trucks
BlackRock’s World Mining Trust has gained 53% in a year
(Image credit: © Getty Images/iStockphoto)

Commodities are on fire. But for private investors, gaining access to a notoriously fickle and unpredictable asset class through a straightforward fund structure is easier said than done. The most popular route for private investors has hitherto been through commodity-equity funds, with the resources team at BlackRock dominating most lists. Their World Mining Trust has gained 53% over the last 12 months.

But commodity equities do not necessarily move in line with the underlying raw-material market. The share price of, say, Glencore or BHP moves for many different reasons, not least underlying cash flows and managers’ decisions.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.