Top Performing Commodity ETFs

Investing in gold ETFs has paid off handsomely over the last year

Alanna Petroff 8 March, 2012 | 11:57AM
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Commodity ETFs (also known as ETCs) can be used as a diversification tool, but they can also provide investors with access to booming markets and impressive returns.

Below, we list the fifteen top-performing ETFs that have had runaway success over the last few years.

Readers will see from the list below that precious metals, such as gold, have benefited from a “flight to safety” sentiment amidst growing debt concerns in the eurozone, says ETF analyst Alastair Kellett.

The returns listed below come from Morningstar’s databases, which were taken from the most recent month-end (February 29, 2012).

Top Performing ETFs Over The Past Year
It’s important to note that all the top-performing ETFs over the last year have been gold ETFs, and some have seen their performance boosted by rising currencies, says Kellett. Gold has also been a favoured commodity because it is known to act as an inflation hedge in the face of continued money-printing by central banks, says Kellett.

RBS Physical Gold ETC (XOB1)
One-year return: 30.57%

db Physical Gold ETC (XGLD)
One-year return: 25.85%

Source Physical Gold P-ETC (SGLD)
One-year return: 25.08%

One-year return: 25.07%

One-year return: 25.03%

Top Performing ETFs Over The Past Two Years
(The returns listed below are annualised returns over two years. This essentially means that the returns over two years are averaged out, and the number listed below is the average return you would have received per year that you were invested. For a more detailed explanation of annualised returns, click here.)

In this set of ETFs, it’s clear that silver has been the big winner over a two-year time horizon.

ETFS Physical Silver ETC (PHSP)
Two-year annualised return: 51.22%
(This ETF trades on the London Stock Exchange and you can invest either in pounds or dollars. It also trades on various other exchanges around the world under different ticker symbols.)

JB (CH) Physical Silver-CHF A (JBSICA)
Two-year annualised return: 47.19%

Source S&P GSCI Silver TR T-ETC (S0CL)
Two-year annualised return: 42.57%

Two-year annualised return: 42.33%

Two-year annualised return: 32.19%

Top Performing ETFs Over The Past Three Years

ETFS Physical Palladium ETC (PHPD)
Three-year annualised return: 53.94%

ETFS Physical Silver ETC (PHSP)
Three-year annualised return: 40.56%

ZKB Palladium ETF CHF (ZPAL)
Three-year annualised return: 39.98%

Three-year annualised return: 35.79%

Three-year annualised return: 31.55%

While performance in these commodity ETFs has been very impressive over the past few years, it is important to note that past performance is not an indicator of future performance. Furthermore, Morningstar recommends that individual investors only hold a small part of their diversified portfolio in commodities.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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