Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Twelve Things You Need to Know About ETFs

By Ben Steverman - 2012-02-27T22:16:37Z

Illustration by Dennis Pacheco

Company Symbol % Change
10 of 14

How do commodity ETFs work?

It's not feasible for ETFs to store commodities such as natural gas or pork bellies. Most commodity ETFs use derivatives, which can trade quite differently from the day-to-day spot price of a commodity. In 2011, the U.S. Natural Gas Fund (UNG) dropped 46 percent, 17 points more than natural gas prices fell. Broad-based commodity funds, such as those based on the 19-commodity Dow Jones-UBS Commodity Index, can ease these concerns, Jennings says. Another choice is commodity ETFs that hold the physical material, such as the $71 billion SPDR Gold Trust (GLD). Investors can also buy stocks of commodity producers through such ETFs as the Market Vectors Agribusiness stocks (MOO) and Gold Miners (GDX) funds.

Read the full Special Report