It’s Time to Consider Precious Metals, Commodity ETFs

As investors consider potential risks ahead, many are looking to ETF strategies that cover alternative assets like precious metals and commodities to help diversify a traditional stock and bond portfolio mix.

“I think equities have done so well for so long. It’s been a really tough conversation to have around adding something different. And, you know, the volatility from Q4 of last year has really sparked a lot of people’s interest and maybe reminded folks the importance of adding diversifying assets and making sure their portfolios are properly diversified,” Stan Kiang, Director for Aberdeen Standard Investments, said at Inside ETFs.

Investors who want to access precious metals may consider a number of physically backed metals-related ETFs as a way to diversify a traditional portfolio mix, including Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL A+), Aberdeen Standard Physical Silver Shares ETF (SIVR B), Aberdeen Standard Physical Platinum Shares ETF (PPLT A) and Aberdeen Standard Physical Palladium Shares ETF (PALL A). ETF investors can also use the Aberdeen Standard Physical Precious Metals Basket Shares (GLTR B+) as a catch-all of all four precious metals.

Investors interested in diversifying their portfolios with broader commodities exposure also have a number of ETF options available to them. Aberdeen Standard Investments offers a line of ETFs to outperform the widely observed Bloomberg Commodity Indices without the need to worry about troublesome K-1 forms come tax season, including the actively managed Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF (BCI n/a) and Aberdeen Standard Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD n/a).

BCI tries to provide long-term capital appreciation that exceeds the performance of the Bloomberg Commodities Index. It may not invest in all the components of the benchmark but will hold similar interests to those included in the index, along with short-term investment-grade fixed-income securities, money market instruments, certain bank instruments and cash or other cash alternatives. The underlying Bloomberg Commodities Index tracks the price of rolling positions in a basket of commodity futures with a maturity between 1 and 3 months.

BCD tries to provide long-term capital appreciation that exceeds the performance of the Bloomberg All Commodity Index 3 Month Forward Index, which tracks movements in the price of rolling position in a basket of commodity futures with a longer maturity between 4 and 6 months.