4 Best Commodity ETFs Of 2020

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After being hit badly by the coronavirus outbreak and the oil meltdown in March, broad commodities bounced off strongly thanks to massive liquidity injections by central banks across the globe and optimism over the vaccines.
    
The Fed has pledged to hold rates near zero and will continue the asset purchase program at the current rate until “substantial further progress” has been made toward reaching maximum employment and healthy inflation. Meanwhile, the vaccination will end the worst-ever pandemic, leading to a faster-than-expected recovery that will spur demand for raw materials from oil to copper. The combination of both factors will also boost investment and spending in 2021.

Additionally, a weak dollar added to the strength as it makes dollar-denominated assets attractive for foreign investors, raising the appeal for commodities. The U.S. dollar registered the first annual drop since 2017 with the ICE U.S. Dollar Index dropping 6.7%.

Precious metals like gold and silver were the star performers as COVID-19 cases continued to surge, raising the appeal for safe-haven demand. The vaccinations have sparked reflation trade, thereby providing further support to these bullions. Both the bullions logged in their best annual performance in a decade. Meanwhile, palladium posted the fifth straight year of gains prompted by a global shift from diesel to gasoline and hybrid vehicles that led to higher demand for the metal and resulted in the speculation of supply deficit.


In the industrial metal space, copper was the outperformer, driven by recovering growth in the world’s second-biggest economy and improving the manufacturing sector worldwide. Notably, China is the top consumer of raw materials.

Given this, we have highlighted four best-performing commodity ETFs of 2020 from these outperforming areas that will continue to trend higher if the favorable factors persist in the New Year too.

Aberdeen Standard Physical Silver Shares ETF (SIVR Quick Quote SIVR - Free Report) – Up 47.5%

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