A number of exchange-traded fund (ETF) and exchange-traded note (ETN) products track the various commodity indices surveyed in an earlier post. Before diving into the commodity index funds, a few points should be noted. All broad-based commodity indices are based on commodity futures contracts, not the spot prices of commodities. The expectation is that the commodity indexes will be correlated with commodity prices but may not track them perfectly. The ETFs and ETNs surveyed in this post track the total return version of the commodity index. A total return index combines the returns of the underlying commodity index with the returns of cash collateral invested in T-bills.

If you are unfamiliar with ETNs, Investopedia has an excellent primer. Note that since ETNs are unsecured debt securities, they are subjected to credit risk. The consensus opinion seems to be that ETN gains (or losses) will be treated as capital gains (or losses) but the tax consequences are by no means settled.

Dow Jones-UBS Commodity Index based securities

The iPath Dow Jones-UBS CI Total Return ETN (NYSE Arca: DJP), which has a MER of 0.75%, appears to be the most popular commodity ETN. As noted in the earlier post, the underlying index tracks futures contracts in 19 commodity markets.

The UBS E-TRACS DJ-UBS CI Total Return ETN (NYSE Arca: DJCI) also tracks the same index. The MER is 0.50% but the ETN is thinly traded.

S&P Goldman Sachs Commodity Index based securities

iShares S&P GSCI Commodity-Indexed Trust (NYSE: GSG) is an ETF that tracks the energy-heavy S&P GSCI. The MER is 0.75%.

iPath S&P GSCI Total Return Index ETN (NYSE Arca: GSP) tracks the same index for a MER of 0.75%. Interestingly, the ETF has tracked the index better than the ETN.

Rogers International Commodity Index (RICI) based securities

The ELEMENTS linked to RICI – Total Return Structured Product (NYSE: RJI) is an ETN that tracks the RICI index for a MER of 0.75%. As noted earlier RICI tracks a diverse basket of 37 commodities.