On this episode of the “ETF of the Week” podcast, VettaFi’s Head of Research Todd Rosenbluth talked about the Neuberger Berman Commodity Strategy ETF (NBCM) with Money Life host Chuck Jaffe. The pair covered a range of topics related to the fund, providing investors with a deeper understanding of the ETF.

Chuck Jaffe: One fund, on point for today, and the expert to talk about it. Yes, this is the ETF of the Week, where we examine trending, new, newsworthy, unique, and intriguing exchange traded funds with the help of Todd Rosenbluth, the head of research at VettaFi. At VettaFi.com, you’ll find all the tools you need to dig into the ideas we talked about here and to get more information on mutual funds you’ve got or are considering. Check it out again at VettaFi.com.

Todd Rosenbluth. Great to chat with you again.

Todd Rosenbluth: It’s great to be back, Chuck.

Chuck Jaffe: Your ETF of the week is…

Todd Rosenbluth: The Neuberger Berman Commodity Strategy ETF (NBCM).

Chuck Jaffe: N-B-C-M. The Neuberger Berman Commodity Strategy ETF begs an immediate question. Why commodities now?

Todd Rosenbluth: Well, I think the market this past week is a great sign for why commodities. Stocks are getting crushed. Inflation is a concern for many investors, many advisors. They’re looking for an alternative to the equity markets, something different to diversify their portfolio. Commodities have been performing much better. This is a fund from Neuberger Berman that has a long track record, as it converted from a mutual fund to an ETF.

It’s got a decent track record as well. From being an ETF, we think now is a great time to take a closer look at an actively managed commodity ETF.

Chuck Jaffe: Let’s talk a little bit about construction and what’s in it. Because commodities mean a lot of things to a lot of people. You can have very specific and tightly focused commodity funds. You can have ones that have a little bit of everything. What is this one?

Todd Rosenbluth: Gold is the largest exposure, but this is an ETF that’s diversified across the commodity spectrum. So there are some energy commodities. There are other precious metals. There’s agriculture like corn within the portfolio. And what active management behind this does is increase or decrease exposure to those commodities based on what the environment is and what commodities are likely to do better.

So coming into the year, there was the less exposure to gold. Gold is now better positioned or presumably based on management’s expectations because, as we’re talking in early April, gold is now the largest weighting. It’s roughly 20% — give or take — of the overall portfolio. So there’s active shifting, potentially on a daily basis, given the environment that we’re in.

Tariffs are top of mind. Inflation is top of mind. This active manager is helping allocate across those different individual commodities.

Chuck Jaffe: Commodities themselves tend to be reasonably volatile. It is an area of the market that scares people. Not because they can’t get their head around it, but because the volatility is a big deal. And this is a fund that if you were looking at it on a trend-following basis, on a moving average basis, when the market tanked after the tariffs were announced, this fund tanked and fell below its 200-day moving average.

But it’s been over and below that a bunch. Is this a fund you really want to control? Like a very limited piece of the portfolio with a very specific job, basically not to be correlated to everything else? Or is this a fund that you’re making a long-term commitment to, come hell or high water?

Todd Rosenbluth: I think investors are seeing the potential benefits of having commodity exposure as a slice of the portfolio, not just the portfolio that invests in stocks or bonds using ETFs, or perhaps mutual funds or individual securities. But having a slice of the portfolio that’s commodities. We tend to find that commodities are roughly a single-digit, maybe midsingle-digit percentage of a diversified portfolio.

But yes, this fund aims to perform differently than the equity market. So I actually think it’s held up quite well in the market environment. And as we’re talking today, it’s up — or it was up — for the year when we were coming in to recording. Whereas of course the S&P 500 is down or was down sharply heading into our recording on Tuesday. I would also point to the fund’s long-term track record. mentioned earlier, this fund converted from a mutual fund into an ETF. Neuberger Berman did that because investors are increasingly turning to ETFs to get their diversified exposure. And this fund is a four-star-rated mutual fund, according to Morningstar, because it’s outperformed its category average consistently.

NBCM’s also outperformed the Bloomberg index tied to the strategy. That’s a great sign in terms of how the fund is performing versus other commoditylike instruments.

Chuck Jaffe: The other thing about this fund is that it is noncorrelated. As you pointed out, it’s basically been up or flattish as we record this this year when the stocks have been way down. But go back to 2022. And this was up about 17%-18% while the market was in the tank. So that’s what you want this fund to do and why you want to add something like this to your portfolio given the volatility and what it holds.

Does this play nice with other things? Do you own this? If you’ve already got a gold fund, because you’re getting a little bit more diversification, how do you decide for sure the role you want it to have?

Todd Rosenbluth: The fund did exactly what it was supposed to do in the past — past performance, not predictive of future results, have to get that disclaimer in there. But yes, what I like about this is this is diversified across the commodity spectrum. But I and maybe the listener doesn’t have the expertise as to if now is the right time to be in gold versus energy commodities. Energy has been selling off this year. Oil prices had been, whereas gold had been climbing even higher.

So if you own a gold ETF or you own a gold mutual fund, this can pair well within your commodity allocation because it provides diversification across the spectrum of commodities. But you get the benefits of active management instead of trying to build it yourself and allocate based on which commodity is more likely to be in demand given the environment and what countries are facing tariffs and what have you, you get the benefits of active management. That pairs nicely with a single-commodity strategy, this Neuberger Berman strategy.

Chuck Jaffe: And you get the benefit of a yield. This fund has a nice yield.

Todd Rosenbluth: Yeah that’s a nice kicker as well for folks; they may not necessarily think about it. But yes, there’s a lot of benefits to the Neuberger Berman Commodity Strategy ETF.

Chuck Jaffe: It’s N-B-C-M, the Neuberger Berman Commodity Strategy ETF, the ETF of the Week from Todd Rosenbluth at VettaFi. Todd, great stuff as always. See you next week.

Todd Rosenbluth: I’ll see you next week, Chuck.

Chuck Jaffe: The ETF of the Week is a joint production of VettiFi and Money Life with Chuck Jaffe.

And I am Chuck Jaffe, and I’d love it if you’d check out my hourlong weekday podcast by going to moneylifeshow.com or by looking for it wherever you find your favorite podcast. And if you’re looking for information on your favorite ETFs, there’s no better place to go than VettaFi.com, where they’ve got a full suite of tools you need to help yourself out. They’re on X @Vetta_Fi, and Todd Rosenbluth, their head of research, my guest here on ETF of the Week, he’s on X too @Todd Rosenbluth.

The ETF of the Week is here for you every Thursday, so make sure you don’t miss an episode by following along or subscribing on your favorite podcast app. And if you like us, leave us a review or comment, because those things really do help. We’ll be back with another new or intriguing ETF next week. Till then, happy investing, everybody.

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