What is the best commodity ETF in Canada?

The most popular commodity ETFs for Canadians include iShares S&P/TSX Global Gold ETF (XGD) for gold mining, iShares S&P GSCI Commodity-Indexed Trust (GSG, US-listed) for broad commodity exposure, and Horizons Commodity ETFs for specific commodities. For a broad basket, Invesco DB Commodity Index Tracking Fund (DBC) provides diversified exposure to energy, metals, and agriculture.

Are commodity ETFs good for inflation protection?

Yes. Commodities have historically been one of the best inflation hedges because commodity prices tend to rise when inflation rises — they are, in fact, a direct component of inflation measures like CPI. Gold, oil, and agricultural commodities all tend to perform well during inflationary periods. Adding 5–10% commodity exposure can improve portfolio resilience during high-inflation environments.

What is the difference between physical and futures-based commodity ETFs?

Physical commodity ETFs (like gold bullion ETFs) hold the actual commodity in a vault. Futures-based ETFs hold commodity futures contracts that must be rolled over monthly, which can create a drag on returns called "contango." Physical ETFs are simpler and more predictable for gold/silver. Futures-based ETFs are necessary for oil, natural gas, and agriculture since physical storage is impractical.

Best Commodity ETFs in Canada (2026)

If you want the broader ETF framework before adding a commodity sleeve, start with our ETFs and index funds hub.

Best Commodity ETFs Listed on the TSX

Broad Commodity

ETF	Ticker	MER	Yield	Holdings	Commodity Exposure	Distribution
iShares Bloomberg Commodity	COW	0.27%	0%	Futures basket	Energy, metals, agriculture	None
Horizons Enhanced Multi-Asset	HEA	0.35%	0%	Futures + equities	Diversified commodities	None

Gold & Precious Metals

ETF	Ticker	MER	Type	What It Holds
iShares S&P/TSX Global Gold	XGD	0.61%	Equity	Gold mining stocks
BMO Equal Weight Gold	ZGD	0.61%	Equity	Equal-weight gold miners
iShares Gold Bullion (CAD-Hedged)	CGL	0.55%	Physical	Gold bullion in vault
iShares Gold Bullion (Unhedged)	CGL.C	0.55%	Physical	Gold bullion (CAD unhedged)
Sprott Physical Gold Trust	PHYS	0.40%	Physical	Allocated gold bullion
BMO Gold Bullion	ZGLD	0.20%	Physical	Gold bullion
iShares Silver Bullion	SVR	0.53%	Physical	Silver bullion
Sprott Physical Silver Trust	PSLV	0.62%	Physical	Allocated silver

Agriculture

ETF	Ticker	MER	Type	Commodities
iShares Global Agriculture	COW	0.68%	Equity	Agriculture companies
Horizons Agriculture	N/A	Varies	Futures	Wheat, corn, soybeans

Energy Commodities

ETF	Ticker	MER	Type	Commodity
Horizons Crude Oil	HUC	1.09%	Futures	WTI crude oil
Horizons Natural Gas	HUN	1.09%	Futures	Henry Hub natural gas
United States Oil Fund	USO (US)	0.60%	Futures	WTI crude oil

US-Listed Broad Commodity ETFs (Accessible from Canada)

ETF	Ticker	MER	Commodities Covered	AUM
Invesco DB Commodity Index	DBC	0.85%	Energy, metals, agriculture	$2B+
iShares S&P GSCI Commodity	GSG	0.75%	Broad basket, energy-heavy	$1B+
Invesco Optimum Yield Diversified	PDBC	0.59%	Broad basket, K-1 free	$5B+
abrdn Physical Precious Metals Basket	GLTR	0.60%	Gold, silver, platinum, palladium	$1B+
SPDR Gold Trust	GLD	0.40%	Physical gold bullion	$60B+
iShares Silver Trust	SLV	0.50%	Physical silver bullion	$10B+

Commodity Types and ETF Options

Commodity Type	Examples	Best ETF Access	Correlation to Inflation
Gold	Bullion, miners	CGL, PHYS, XGD	Moderate-high
Silver	Bullion	SVR, PSLV, SLV	Moderate
Oil	WTI, Brent	HUC, XEG, USO	High
Natural gas	Henry Hub	HUN, natural gas equities	Moderate
Agriculture	Wheat, corn, soybeans	COW, DBA, agricultural equities	High
Copper	Industrial metal	Copper mining ETFs, COPX	Moderate
Broad basket	All of the above	DBC, PDBC, GSG	High

Physical vs Futures-Based Commodity ETFs

Gold is the clearest example of the physical approach in practice, so compare best gold ETFs in Canada.

Factor	Physical ETF	Futures-Based ETF
How it works	Holds real commodity in vault	Holds futures contracts, rolls monthly
Available for	Gold, silver, platinum, palladium	Oil, gas, agriculture, metals, broad baskets
Tracking accuracy	Very high — tracks spot price closely	Can diverge due to contango/backwardation
Roll cost / contango drag	None	2–5% annual drag in contango markets
Storage cost	Included in MER (vault fees)	N/A
Tax treatment	Capital gains on sale	Capital gains (may vary by structure)
Best for	Gold/silver buy-and-hold	Broad commodity baskets, short-term
Examples	CGL, PHYS, GLD, SLV	DBC, GSG, HUC

Commodities as an Inflation Hedge

Historical Performance During High-Inflation Periods

Period	CPI Inflation	Gold Return	Oil Return	S&P 500 Return
1973–1974	12%	+67%	+200%+	-40%
1979–1980	13%	+120%	+100%+	+18%
2021–2022	6–8%	+1%	+65%	-18%
2022–2023	4–6%	+13%	-5%	+16%

Past performance does not guarantee future results.

Portfolio Allocation

Recommended Commodity Allocation

Investor Profile	Commodity Allocation	How to Implement
Conservative	0–5%	Gold bullion ETF (CGL, PHYS)
Balanced	5–10%	Gold + broad commodity (CGL + DBC)
Inflation-worried	10–15%	Gold + commodities + TIPS
Aggressive/tactical	15–20% max	Broad basket + sector bets

This is a satellite sleeve decision, so it should follow your core allocation work in asset allocation by age.

Sample Portfolio with Commodity Sleeve

Holding	Allocation	Role
XEQT (All-equity)	60%	Core global equity
ZAG (Bonds)	15%	Stability
CGL (Gold bullion)	5%	Inflation hedge, crisis insurance
DBC (Broad commodities)	5%	Inflation hedge, diversification
XEG (Energy equities)	10%	Canadian energy income
REITs	5%	Real assets

Risks of Commodity ETFs

Risk	Detail
No income	Most commodity ETFs pay no dividends (they hold commodities, not businesses)
Contango drag	Futures-based ETFs can lose 2–5% annually to roll costs
High volatility	Oil can swing 30–50% in a year; gold is less volatile but still cyclical
USD exposure	Many commodities are priced in USD — currency affects CAD returns
Zero long-term real return	Commodities don’t generate earnings — long-term returns are near inflation
Complexity	Futures contracts, roll yields, and tax treatment can be confusing
Supply/demand shocks	Weather, geopolitics, OPEC decisions create unpredictable swings

If your main concern is inflation protection rather than raw commodity beta, compare best bond ETFs in Canada and best infrastructure ETFs in Canada.

Tax Considerations

Commodity ETF Type	TFSA/RRSP Treatment	Non-Registered Treatment
Gold bullion (CGL, PHYS)	Capital gains tax-sheltered	Capital gains on sale (50% inclusion)
Gold miners (XGD)	Dividends + capital gains sheltered	Eligible dividends (Canadian) + capital gains
Futures-based (DBC)	Capital gains sheltered	Complex — may include ROC
US-listed (GLD, SLV)	Subject to US estate tax risk >$60K	Foreign reporting requirements