3 Obscure Equity-Based Commodities ETFs Worth Considering

There are exchange-traded products based on physical holdings of commodities, predominantly precious metals. Then there are those that track futures. In this case, it's usually agriculture and energy commodities. And then there are those funds that offer commodities exposure through equities. Regarding equity-based commodities ETFs, it's safe to say most investors are at least aware of the dominant funds in this sub-sector such as the Energy Select Sector SPDR XLE and the Market Vectors Agribusiness ETF MOO. Those are the ETFs you turn to when you want to be involved more conservative, known quantities such as Deere DE, Potash Corp. POT, Exxon Mobil XOM and Chevron CVX. Of course, funds like MOO and XLE aren't the only game in town when it comes to playing another potential commodities boom via equities. In fact, the growth of this ETF sub-sector means now is as good of a time as any for investors to go off the beaten in search of some nifty equities commodities ETFs. Here are a few to consider. IndexIQ Global Agribusiness Small-Cap ETF CROP: We've been fans of CROP since the ETF came to market in late March. In that time, CROP has hauled in over $40 million in assets under management, not bad at all for an ETF focusing on small-caps and a high-beta sector. There are a couple of things to like about CROP. First, it has no noticeable overlap with MOO in terms of holdings, so if you want to devote a large part of your portfolio to agribusiness stocks, then owning MOO and CROP together makes sense. Second, the fertilizer industry seems ripe for consolidation with MOO constituents doing the buying and CROP holdings looking like decent takeover plays. Global X Oil Equities ETF XOIL: We've spent a lot of time in November highlighting obscure oil ETFs so let's add another to the list with the Global X Oil Equities ETF. The fund also debuted in March and is currently home to an all U.S. and Canadian mix of 25 stocks. You've heard of some of XOIL's holdings such as Apache APA and ConocoPhillips COP, but dig deeper and you'll find that this ETF is far different than a fund like XLE. First Trust Energy AlphaDEX ETF FXN: Let's just call the First Trust Energy AlphaDEX ETF a “killing multiple birds with one stone” ETF. Integrated oil companies? Check. Independent oil producers? Check. Oil services providers? Check. Coal producers? Check. Refiners? Check. FXN does all that with 55 stocks. You'll pay up for the versatility with an expense ratio of 0.7%, but on the other hand, it's rare to find an ETF tracking energy stocks that is this versatile. One could own 10 stocks or five ETFs trying to accomplish what FXN does in one fund. Bull case: Every ETF highlighted here qualifies as “high-beta.” That means the risk on trade has to come back on with a vengeance. Also constructive to the fortunes of XOIL and FXN would be oil holding the $100 a barrel area. A bounce in natural gas prices would help those funds as well, but could crimp CROP's returns. QE 3 helps all of them. Bear case: Europe's commodities demand wilts under the sovereign debt crisis. China's economy slows and economic activity in the U.S. doesn't ramp up fast enough to bolster any of these plays.