Tracking errors make commodity ETFs unsuitable for most investors, says fund manager

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Oil ETFs have had the largest tracking error in the past year

Several commodity indexes tracked by exchange-traded products (ETPs) have significantly underperformed the spot prices of their underlying commodities over the past year, sometimes delivering double-digit underperformance, according to Moonraker Fund Management.

“Some exchange-traded funds (ETFs) can suffer tracking errors because of the index methodologies, which might not be efficient in all market conditions. People think they are investing in the actual commodity when in fact they are invest

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