ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Hi Everyone,

I was wondering if anyone knows the best way for a retail investor to gain exposure to commodities in the Singapore market. I am aware we can buy commodity related stocks like Wilmar, Noble, Olam and Golden Agri but I am extremely wary of them as I am not familiar with their business models and how they are to be valued. I also understand that gaining commodity exposure gained via this counters is not very 'pure' due to a large number of other factors at play.

Ideally, the instrument I am looking at is an ETF which tracks a broad based commodity index and was wondering if something like this or close to this is accessible in the Singapore market. I am aware of the 2 LYXOR funds but they seem to be very illiquid and was wondering if anyone here might know of a better/cheaper/more efficient option

Thank you

David.

David

Are you merely referring to agricultural commodities or commodities in general? We have energy (crude, coal, natural gas, uranium), precious metals (silver, gold, palladium, platinum), industrial (copper, iron, aluminium, nickel), agricultural (cattle, wheat, soya beans, palm oil, orange juice, sugar), strategic commodities (flake graphite, lithium, rare earths), etc...

I am looking at commodities in general. It would be best if I could track a broad based index such as the Dow Jones UBS commodity index.

http://en.wikipedia.org/wiki/Dow_Jones%E...dity_Index

Bloomberg

If Bloomberg is any guide, there are 4 indexes indicated in the commodities page. I do not think that it is possible to gain exposure to them in the Singapore market.

Open an account with phillip futures or uob bullion and futures. Think phillip offers more commodities products.

http://phillipfutures.com.sg/en/products

(19-05-2013, 12:39 AM)davidsim Wrote: [ -> ]Hi Everyone,

I was wondering if anyone knows the best way for a retail investor to gain exposure to commodities in the Singapore market. I am aware we can buy commodity related stocks like Wilmar, Noble, Olam and Golden Agri but I am extremely wary of them as I am not familiar with their business models and how they are to be valued. I also understand that gaining commodity exposure gained via this counters is not very 'pure' due to a large number of other factors at play.

Ideally, the instrument I am looking at is an ETF which tracks a broad based commodity index and was wondering if something like this or close to this is accessible in the Singapore market. I am aware of the 2 LYXOR funds but they seem to be very illiquid and was wondering if anyone here might know of a better/cheaper/more efficient option

Thank you

David.

SGX started its commodity offerings few years ago. Trading volume is picking up slowly and limited to few products.

More info from SGX website

http://www.sgx.com/wps/portal/sgxweb/hom.../overview/

Except for the gold etf, most ETF uses futures to gain exposure to the commodity. Hence, you are not buying any physical commodities but you are indirectly buying a futures contract. Due to the futures rollover costs, ETF do not track the underlying commodities well over longer term. E.g. you can check the USO ETF prices from 2008, it does not follow the increase in oil prices.

best way to expose to commodity is still to do futures trading.