Keyword: best commodity ETFs for beginner investors
When I first started investing, the stock market felt like enough of a jungle. Then I stumbled into the world of commodities — gold, oil, agriculture — and things got even more interesting (and honestly, a little intimidating). I wanted to diversify beyond tech stocks, but I had no idea where to start. That’s when I discovered commodity ETFs — and let me tell you, they were a game-changer.
If you’re curious about the best commodity ETFs for beginner investors, I’ve got you covered. I’ll walk you through the top picks I found, why I chose them, and what I learned along the way — including a few rookie mistakes you can avoid.
Why I Wanted to Invest in Commodities
Let’s rewind a bit. I started looking into commodities during a period of high inflation (thanks, post-pandemic chaos). Prices at the gas pump were crazy, food costs were up, and my grocery bills were basically shouting, “You should diversify!”
The more I read, the more I realized commodities tend to perform well when inflation is high or when stocks are struggling. It made sense: gold as a hedge, oil as an economic indicator, and agriculture as a basic need.
But I wasn’t ready to dive into buying physical gold bars or speculating on wheat futures. That’s where ETFs came in.
What Are Commodity ETFs (and Why Are They Great for Beginners)?
ETFs, or Exchange-Traded Funds, are like baskets of assets that you can buy and sell just like stocks. Commodity ETFs track the price of things like gold, oil, or even baskets of different commodities.
Here’s why they’re great for beginners:
- Easy to buy through any brokerage account
- Diversification without picking individual assets
- No need to store anything physical(like barrels of oil or gold coins)
- Lower cost than mutual funds or futures contracts
Okay, now let’s get into the good stuff — the actual ETFs.
My Top Picks: Best Commodity ETFs for Beginner Investors
These are the ETFs I found most beginner-friendly, with simple access, decent liquidity, and straightforward strategies.
SPDR Gold Shares (GLD)
Focus: Gold
Why I Like It: Gold is the classic inflation hedge — and this ETF makes investing in it incredibly simple.
I added GLD to my portfolio when inflation fears were rising. It felt like a “safe haven” move. It doesn’t pay dividends, but it tends to hold value well when the economy looks shaky.
Pros:
Easy way to gain gold exposure
Highly liquid and well-known
Backed by physical gold stored in vaults
Watch out for: Slightly higher expense ratio than some other ETFs (0.40%)
iShares S\&P GSCI Commodity-Indexed Trust (GSG)
Focus: Broad commodity exposure (energy, metals, ag)
Why I Like It: This ETF gave me a one-stop shop for multiple commodities.
I wanted more than just gold, so I grabbed a few shares of GSG. It’s energy-heavy (lots of oil), but it also has exposure to industrial metals and agriculture. A good option if you’re looking for general exposure without picking individual commodities.
Pros:
Broad diversification across sectors
Good inflation hedge
Easy entry point
Cons:
Heavily weighted toward oil (which adds volatility)
Doesn’t track spot prices perfectly due to futures rollover costs
Invesco DB Commodity Index Tracking Fund (DBC)
Focus: Broad commodities, actively managed
Why I Like It:This one feels a little more sophisticated — but still beginner-friendly.
DBC was the second commodity ETF I added after GSG. What makes it different is that it adjusts the weighting of its holdings based on market trends. It’s a little more dynamic, which can help performance.
Pros:
Broad-based exposure
Managed to reduce roll yield losses
Good trading volume and liquidity
Cons:
Slightly higher expense ratio (0.85%)
Still uses futures (which means potential tax complications)
United States Oil Fund (USO)
Focus: Oil (WTI Crude)
Why I Like It: When I wanted to speculate a little on oil prices, USO was the first place I turned.
USO tracks the price of crude oil using futures contracts. It’s a little more volatile than GLD or GSG — and I quickly learned that oil doesn’t always move the way you expect. But if you want to get exposure to oil prices without buying futures directly, this is a good place to start.
Pros:
Direct exposure to oil price movements
Easy to buy and sell
Cons:
Performance can differ from spot oil prices
Rolling futures can cause drag in contango markets
Super volatile — not for the faint of heart
Pro Tip: Use this more as a short- to medium-term play. It’s not great for long-term holding.
Teucrium Corn Fund (CORN)
Focus: Corn (yes, really)
Why I Like It: I wanted to try an ag-focused ETF, and CORN was a fun experiment.
I added CORN to my portfolio just for diversification — and because I thought food prices would keep rising. It’s more niche, but it’s a good intro into agriculture investing without diving into futures.
Pros:
Pure play on a specific ag commodity
Good for diversification
Cons:
Lower volume and liquidity
More price volatility due to weather and geopolitical risks
How I Picked These ETFs
Here’s the checklist I used when picking commodity ETFs as a beginner:
Liquidity
If it doesn’t trade much, I don’t want it. I looked for ETFs with solid trading volume so I wouldn’t get stuck in weird bid-ask spreads.
Expense Ratio
I kept an eye on fees. Most commodity ETFs have higher expense ratios than stock ETFs, but I avoided anything above 1%.
Simplicity
If I couldn’t understand how the ETF worked within 10 minutes, I skipped it. Complexity usually leads to mistakes.
Performance History (But Not Obsessively)
Past performance isn’t everything, but I wanted to see how the ETF behaved in different market conditions (like the 2020 crash or 2022 inflation surge).
What I Learned the Hard Way
I made a few rookie mistakes — and here’s what I’d do differently:
1. Don’t Overload on One Sector
My first instinct was to buy multiple oil ETFs — but that just added unnecessary risk. Diversify across sectors (metals, energy, ag).
2. Understand the Role of Futures
Most commodity ETFs don’t hold the physical commodity. They use **futures contracts**, which means their performance may not match the spot price perfectly. Futures also come with something called *roll yield*, which can erode returns.
3. Watch the News
Commodities are extremely sensitive to world events. OPEC announcements, droughts, geopolitical tension — all of it matters. Set alerts or check the news regularly.
Final Thoughts: Best Commodity ETFs for Beginner Investors
Getting into commodity ETFs opened a new world for me as an investor. It made my portfolio more balanced and helped me feel better prepared for inflationary periods or stock market volatility.
If you’re just starting out and looking for the best commodity ETFs for beginner investors , here’s a quick recap:
ETF Best For
- GLD Simple gold exposure
- GSG Broad commodity exposure
- DBC Managed, dynamic commodity exposure
- USO Oil speculation CORN Agriculture diversification
Start small. Pick one or two that match your goals. And remember — these are tools, not magic money machines. Keep learning, stay diversified, and don’t be afraid to ask questions (even the “dumb” ones — I sure did!).
If you’ve got a favorite commodity ETF or a story of your own, feel free to share it — I’m always learning, and you never know what hidden gem someone else has found!
Next Article To Read: The Risks I Learned About When I Started with Commodities