COMMODITIES INVESTING WITH iSHARES

Investing in commodities like precious metals, critical minerals, agricultural products, and energy can help investors diversify portfolios, seek returns that differ from stocks or bonds and hedge against inflation.

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sheep in a field
sheep in a field

WHY INVEST IN COMMODITY ETPs

Investing in commodity exchange-traded products (ETPs) can offer several advantages for investors seeking exposure to the commodities market. Here are some reasons why individuals might choose to invest in commodity ETPs.

01.

Diversification

Commodity prices, influenced by factors like weather and geopolitics, have generally shown lower correlation to stocks and bonds. Investors can use them for portfolio diversification.

02.

Hedge against inflation

Commodities prices have historically risen in tandem with inflation. Investing in broad or single commodity ETPs can help hedge against inflation in portfolios.

03.

Potential returns

Commodities, with low correlation to stocks and bonds, can help diversify portfolios across business cycles. iShares commodity ETPs can provide potential alignment with investors' views on economic growth with liquidity benefits similar to trading a stock.
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Asset class index performance during different inflation scenarios

Chart of index performance of equities, fixed income and commodities asset classes during different inflationary periods

Source: BlackRock Calculation, Bloomberg as of 11/30/2023. Inflation periods defined by QoQ Seasonally-adjusted CPI changes of more or less than 18bps, or 40%, from the median QoQ CPI change of 44bps. Inflationary periods measured between Oct 2000 and Nov 2023. Equities are proxied by the S&P 500 Index, Fixed Income is proxied by the Bloomberg US Aggregate Bond Index, Commodities proxied by the S&P GSCI Total Return Index. For illustrative and educational purposes. Not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Index performance is for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

Chart Description: Chart of index performance of equities, fixed income and commodities during different inflationary periods showing how commodities performance as an asset class varies widely in relation to equities and fixed income across periods of rising, stable, and declining inflation.

iSHARES COMMODITY ETPs SPOTLIGHT

Commodities investing doesn't have to be complicated. iShares Commodity ETPs offer three distinct ways to gain exposure to them and a variety of options to choose from.

METALS STRATEGY

Our precision metals strategy ETPs target the price performance of gold or silver.
BROAD

Our broad commodity ETPs target a wide range of commodities including energy, metals and agriculture.
COMMODITY EQUITIES

Gain exposure to the companies that directly mine or produce commodities.
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FREQUENTLY ASKED QUESTIONS

Commodities are raw materials that are either consumed directly or used as building blocks to create other products. Investing in commodities can offer several advantages, including serving as a hedge against inflation and diversification. Commodity prices often show lower correlation to stocks and bonds as prices may be influenced by factors like weather. Commodities can also serve as a hedge against inflation.

Unlike stocks or bonds, commodities represent actual physical goods like gold, oil, or agricultural products, offering direct exposure to the material’s price movements.

Investors can gain exposure to physical precious metals (e.g. gold and silver), commodity futures (e.g. energy and agricultural commodities), and the stocks of companies that produce commodities across our broad array of commodity ETPs.

Investing in commodities and commodities exchange traded products carries a high degree of risk, and you could lose all or a substantial portion of your investment. These investments are subject to fluctuations affecting (or similar to those affecting) individual commodity prices, and are influenced by unpredictable factors such as weather, geopolitical turmoil, and economic developments. Additionally, any international investing, including in commodities-related equities or fixed income exposures, involves risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments.

Commodity ETPs (exchange-traded products) are investment vehicles that trade on an exchange and offer investors exposure to a range of commodities. They hold physical commodities, commodities futures or the stocks of commodities producers. These ETPs provide a low-cost and easy way for investors to gain exposure to commodities, which may potentially hedge against inflation and serve as strategic tool for portfolio diversification.

Commodity prices are driven by a complex interplay of factors, including but not limited to supply and demand dynamics, geopolitical events, and varying economic conditions. Market volatility can arise from various factors such as changes in weather patterns which may impact the price of agricultural commodities or shifts in energy production which could impact the price of energy commodities. For investors in commodity ETPs, understanding these factors is key to navigating the potential for both growth and risk within the commodities market.