Commodities Ex Crypto (US Tax)

by
Bethany Krapohl
A diversified allocation to commodities, to provide an inflation benefit and to diversify from traditional stock and bond exposures.

Strategy Description

Exposure to commodities allows investors to take advantage of 4 key global trends:

  • Sustainability the move to carbon neutrality requires more copper, iron ore, silver, nickel, cobalt, aluminum, etc. This is positive for industrial metals and provides a long-term tailwind
  • Infrastructure the US needs to upgrade infrastructure and China has not developed many parts of the interior. Commodities are required for both countries’ growth / infrastructure plans.
  • Supply producers have carefully managed capex to improve bottom lines and ESG scores, as well as to prepare for a fossil-free world. This limited supply cannot be resolved overnight.
  • Inflation & USD weakness since commodities are finite and priced in USD, their inclusion in portfolios can improve returns in a world of monetary supply expansion and potential inflation.

This strategy invests across the commodity spectrum – precious and industrial metals, agriculture commodities and energy markets.

Daily transparency and liquidity; implementation is via low-cost ETFs to minimize costs.

Portfolio Performance

202120222023YTD
Portfolio (%)6.676.66-2.8710.09
Annualized ReturnStandard DeviationDividend Yield
Portfolio7.06%17.28%0%

Allocation Breakdown

Asset Class


Equity0
Fixed Income0
Commodities99.56%
Cash0.44%

Geo


North America84.55%
Greater Europe16.25%
Other0

Sector


Gold18.15%
Silver14.25%
Industrial Metals24.24%
Broad Commodities32.69%
Energy10.24%

Top Holdings

Asset ClassWeight (%)
1. Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF32.69%
2. abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF24.24%
3. SPDR Gold MiniShares Trust18.15%
4. abrdn Physical Silver Shares ETF14.25%
5. Invesco DB Energy Fund10.24%

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