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Commodities ETF (GSG) Hits New 52-Week High

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For investors seeking momentum, iShares S&P GSCI Commodity Indexed Trust GSG is probably on radar. The fund just hit a 52-week high, and is up 46.7% from its 52-week low of $13.65 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

GSG in Focus

The S&P GSCI Total Return Index provides exposure to broad-based commodities. The fund charges 75 bps in fees. Energy takes about 60% of the fund while agriculture accounts for about 18.3% of the fund. Industrial metals make up about 12% of GSG.

Why the Move?

Energy rally has been witnessed for past few weeks. A host of factors have aided the rally. Growing vaccine distribution, economic reopening, tight supplies amid capex constraint and geopolitical tensions both in Middle East and Russia boosted energy prices. Then a freezing weather instigated the oil rally in February as ice is causing troubles to trucking.

If these were not enough, prices for most agricultural commodities have been hovering around multi-year highs. Supply crunch has led to the rally in agricultural products. And a global drive for clean energy has been aiding metal prices.

More Gains Ahead?

The fund has a positive weighted alpha of 46.80 (per barchart.com), which gives cues of further rally.


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iShares S&P GSCI CommodityIndexed Trust (GSG): ETF Research Reports
 
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Zacks Investment Research

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