Exchange-Traded Commodities (ETCs) are investment vehicles that track the price of physical commodities or commodity indices. ETCs provide liquidity and transparency without the logistical complexities of physical custody or direct futures market execution. Structurally, ETCs are organized as either physically backed grantor trusts or futures-based debt/partnership instruments:
These funds hold the physical commodity in secure bank vaults (typically gold or silver, e.g., SPDR Gold Shares GLD(.40%), iShares Gold Trust IAU(.25%), iShares Silver Trust SLV(0.5%)). Payouts track the spot price of the underlying metal, net of management fees.
These invest in derivative contracts to track commodities that cannot be physically stored at scale (e.g., crude oil United States Oil Fund USO(.70%), natural gas United States Natural Gas Fund UNG(1.01%), or agricultural baskets Invesco DB Agriculture Fund DBA(.93%)).