Skip to content
Beacon

Best Commodity ETFs

Raw-materials exposure for inflation and diversification

ETFs tracked

84

Avg TER

0.79%

Median CAGR 3Y

+17.0%

Commodity ETFs give you exposure to physical goods — precious metals, energy, agriculture, industrial metals — either through physical storage (GLD, SLV), futures rolls (DBC, PDBC), or producer equities. They serve two main jobs in a portfolio: inflation hedging and equity diversification, because commodity prices respond to different economic forces than stocks or bonds.

Gold is the category's anchor. Since 2001, gold has returned roughly 7.5% annualized in USD, with strongest performance during negative-real-rate environments and monetary stress. Physical-backed funds like GLD and IAU track spot prices directly. Broad commodity baskets (oil, grains, metals, softs) have delivered closer to 3.5% annualized over the same window with far more volatility, because rolling futures contracts forward creates contango drag when curves are upward sloping.

Structure matters more in commodities than in any other asset class. A physical gold ETF (IAU at 0.25%) owns actual bullion in a vault. A futures-based commodity ETF issues K-1 tax forms in the US and rolls contracts monthly. A commodity-producer ETF (XME, GDX) holds mining stocks whose prices depend partly on equity-market sentiment. These three "gold ETFs" behave differently enough that they're almost different asset classes.

Beacon ranks commodity ETFs on cost, structure clarity, and risk-adjusted track record. Physical-backed funds generally score highest; high-fee futures products with structural drag score lowest.

Who this is for

  • Investors seeking inflation protection or equity diversification
  • Portfolio builders adding 5–10% in real assets
  • Not suitable for investors who need income — most commodity ETFs yield zero

Top 10 ETFs

#TickerCAGR 3YVol 1YMax DDTER
1
IAU
+32.0%27.02%-21.8%0.25%
2
SGOL
+32.1%26.92%-21.6%0.17%
3
GLDM
+32.2%26.98%-21.6%0.10%
4
IAUM
+32.3%26.91%-20.9%0.09%
5
GLD
+31.8%27.20%-22.0%0.40%
6
AAAU
+32.1%26.91%-21.6%0.18%
7
SIVR
+44.3%57.13%-42.4%0.30%
8
OUNZ
+32.0%27.00%-21.8%0.25%
9
BAR
+32.1%27.03%-21.5%0.17%
10
BCI
+15.7%16.56%-32.7%0.26%

Browse all 84 commodity ETFs

Filter, sort, and compare in the Beacon screener

Open screener

Frequently asked questions

What is a commodity ETF?
A commodity ETF gives you exposure to physical raw materials. Some hold the actual commodity in a vault (gold, silver). Some use futures contracts to track commodity prices. Some hold shares of commodity-producing companies. Each structure has different costs and tax treatment.
Is gold a good inflation hedge?
Historically yes, but not every year. Gold has tracked long-run purchasing power since 1900 and tends to outperform during periods of negative real interest rates or monetary stress. Short-term it can move independently of inflation. For short-horizon inflation protection, TIPS are more direct.
What's the difference between a gold ETF and a gold miner ETF?
Gold ETFs (GLD, IAU) own physical bullion and track the spot price of gold. Gold miner ETFs (GDX, GDXJ) hold equity stakes in mining companies and behave more like leveraged bets on gold — they tend to outperform gold on the way up and underperform on the way down.
Do commodity ETFs issue K-1 tax forms?
Some do. Futures-based commodity ETFs organized as limited partnerships (DBC, USO) issue K-1 forms, which complicate tax filing and can create unrelated business taxable income in IRAs. Physical-backed ETFs (GLD, IAU) issue standard 1099 forms.

Related Asset Class

Related reading

What Is an ETF? (And Why It Matters)

An ETF is a basket of investments you can buy with a single trade. Here's how they work, why they're popular, and what to watch out for.

6 min read

Understanding Expense Ratios: The Fee That Eats Your Returns

The expense ratio is the single most important number on an ETF factsheet. Here's what it is, why it matters, and what 'cheap' actually means.

5 min read