Instruments for tracking commodities

ETCs are debt securities that track the development of commodities and commodity indices. They are similar to Exchange Traded Funds (ETFs) and share many of their advantages: they are open in structure, cost-effective, offer investors high liquidity, and the price setting process is transparent.

ETCs are available in four different product categories (precious metals, industrial metals, energy, agricultural products) and for different investment strategies (short and leveraged). Within individual categories, investors can choose from a broad variety of products. Metals are subdivided into industrial metals (aluminum, copper, nickel, zinc, tin) and precious metals (gold, silver, platinum, palladium and rhodium). In the energy category, investors can opt for ETCs on crude oil, heating oil, gasoline and natural gas. A wide spectrum of ETCs is also available in agricultural products, ranging from wheat, sugar, corn, soybeans and coffee to cotton and soy-bean oil – there are even ETCs on live cattle and lean hogs. 

Investors seeking to diversify risk may wish to buy into ETCs for entire commodity baskets; for example covering several metals or different energy sources, types of grains or livestock. The broadest investment is provided by ETCs on a basket of all commodities. Moreover, there are currency-hedged ETCs which allow investors to participate in the performance of individual commodities like gold, oil or industrial metals while eliminating currency risks.

Trading in ETCs is easy and comfortable within Xetra trading hours. Designated Sponsors offer buy and sell prices at high quotation volumes. Flexibility is enhanced through the use of different order types (e. g. limit and stop orders) and a minimum trade size of one share.