If you haven’t seen the old ‘dead cat bounce’ in Crude Oil recently, we’re looking at a 50% or so rebound from around $40 up to $60, making our “How to Play a Bounce in Oil (Hint: Not $USO)” post quite on point, both from a timing standpoint, and from the $USO pan – with December WTI now up 6.09% YTD while the $USO ETF is only up 0.74% {Disclaimer: Past performance is not necessarily indicative of future results}. Whether this bounce keeps bouncing or not, here’s our monthly look at:
1. How the numerous commodity ETFs which have sprung onto the scene the past few years are tracking a simple strategy of just buying the December futures market of that commodity, under the theory that the ETF will have to roll their positions periodically throughout the year, and in doing so take on costs the simple strategy does not have.
2. How the passive investment strategy of being long commodities (either via futures or ETFs) compare to an active strategy going both long and short commodity markets via a professional commodity trading advisor (as tracked by the BarclayHedge Ag Trader Index).
(Performance as of 4/30/2015)
Commodity ETF Over/Under Performance 2015
| Commodity | Futures | ETF | Difference |
|---|---|---|---|
| Crude Oil | $CL_F 6.09% | $USO 0.74% | -5.35% font> |
| Brent Oil | $NBZ_F 6.48% | $BNO 7.05% | 0.57% |
| Natural Gas | $NG_F -7.25% | $UNG -8.87% | -1.62% font> |
| Cocoa | $CC_F 2.07% | $NIB 1.01% | -1.05% font> |
| Coffee | $KC_F -18.73% | $JO -22.21% | -3.48% font> |
| Corn | $ZC_F -8.93% | $CORN -11.67% | -2.74% font> |
| Cotton | $CT_F 3.45% | $BAL 11.61% | 8.16% |
| Live Cattle | $LE_F -2.73% | $CATL -3.04% | -0.31% font> |
| Lean Hogs | $LH_F -5.31% | $HOGS -20.06% | -14.75% font> |
| Sugar | $SB_F -13.21% | $CANE -12.84% | 0.37% |
| Soybeans | $ZS_F -5.30% | $SOYB -5.73% | -0.43% font> |
| Wheat | $ZW_F -18.29% | $WEAT -20.30% | -2.02% font> |
| Average strong> | -7.03% strong> | -5.14% strong> | -1.89% strong> font> |
| Average without Hogs strong> | -5.84% strong> | -5.12% strong> | -0.72% strong> font> |
| Commodity Index $DBC | -0.87% font> | ||
| Long/Short Ag Trader CTAs | -0.02% |
(Disclaimer: Past performance is not necessarily indicative of future results)
(Disclaimer: Sugar uses the October contract, Soybeans the November contract.)
Long/Short Ag Trader CTA = Barclayhedge Ag Traders Index
