Q: Dear Peter et al:
Thanks for your nice answer to Don's question today. (Friday, the 8th of September) regarding commodities. You gave a nice selection of ETFs. Looking at them they all have high concentration of energy sector and metals. MER in 70 or 80 basis points.
I wondered however if it would be better for me to hold XBM and XEG instead and lessen the fees plus opt for these bigger fund names with much higher market cap.
However I know I will miss sectors like corn, soybean, cotton etc.,
BNN had Mr. Rick Rule yesterday and he is of course a Metals and Mining Guru! This plus your answer to Don's question made me think of taking a small position in commodities . Looking at the most efficient and cost effective way to do his. Any thoughts?
Thank you in advance.
Thanks for your nice answer to Don's question today. (Friday, the 8th of September) regarding commodities. You gave a nice selection of ETFs. Looking at them they all have high concentration of energy sector and metals. MER in 70 or 80 basis points.
I wondered however if it would be better for me to hold XBM and XEG instead and lessen the fees plus opt for these bigger fund names with much higher market cap.
However I know I will miss sectors like corn, soybean, cotton etc.,
BNN had Mr. Rick Rule yesterday and he is of course a Metals and Mining Guru! This plus your answer to Don's question made me think of taking a small position in commodities . Looking at the most efficient and cost effective way to do his. Any thoughts?
Thank you in advance.
5i Research Answer:
We would not have any issues holding XBM and XEG. While 'other' commodities can add diversification, many other markets (i.e corn etc.) are smaller and less important in the grand scheme of economic influences. A combo of XBM and XEG we think would correlate well with commodities in general. From a cost-efficiency point of view an ETF provides instant diversification. It would be cheaper to set up a portfolio of individual stocks, but this is of course more cumbersome. If looking for generalized exposure and a 'small' position it makes more sense to use one or two low cost ETFs, certainly.