MW This commodities strategy can protect you from inflation, scarcity and even price declines
By Philip van Doorn
The Harbor All-Weather Strategy ETF will shift its portfolio as the inflationary environment changes
A dynamic commodities strategy can enhance an investment portfolio's returns over the long term.
During conflicts that disrupt the flow of an important commodity such as crude oil, some investors will wish they had more exposure to commodities before the conflict began. But Kristof Gleich, the chief investment officer of Harbor Capital Advisors in Chicago, made the case for the typical investor to have a 10% exposure to commodities regardless of what is going on in the world.
The key element of Harbor's strategy for long-term investors is to profit while protecting against inflation. This comes from following a methodology that evolves as the causes of inflation change. It can provide opportunities for profits no matter how commodity prices move.
Harbor Capital had about $67 billion in assets under management as of Dec. 31, through separately managed accounts for clients and institutions and through its mutual funds and exchange-traded funds.
The Harbor All-Weather Strategy ETF HGER has grown to $2.4 billion in assets under management since it was established in February 2022. It has a five-star rating (the highest) within Morningstar's "U.S. Fund Commodities Broad Basket" category. The exchange-traded fund tracks the Quantix Commodity Index (QCI), which is designed to protect investors from inflation by shifting its commodities mix as it is reconstituted every quarter.
The most commonly cited and benchmarked commodities index is the Bloomberg Commodity Index XX:BCOM, which tracks 24 physical commodities and is weighted by production and trading volumes.
In an interview with MarketWatch, Gleich said BCOM was "a tool used to create liquidity so commodity producers and hedgers could transfer risks more easily," but that QCI was "designed to create a more optimal investment outcome."
"So the index design has to incorporate inflation sensitivity of commodities, the shape of the commodities curve, and investing in commodities in backwardation versus contango," he said.
We are transitioning from strictly a debasement inflationary environment to one that is more balanced between scarcity and debasement.Kristof Gleich, chief investment officer of Harbor Capital Advisors
Backwardation is when futures prices for near-term delivery of a commodity are higher than prices for delivery further down the line.
Contango is the opposite situation, in which a commodity's futures prices are higher in months and years ahead.
A key component of QCI, as it is reconstituted quarterly, is to pursue "roll yield." Rather than simply betting that certain commodity prices will rise, this strategy takes advantage of periods when current spot prices are high and demand is expected to decline later. Current profitable futures contracts are rolled into lower-priced futures that are only one to two months out, Gleich said.
Here is a chart showing HGER's total return from when it was established on Feb. 9, 2022, through Wednesday, compared with that of the State Street SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 SPX. All investment returns in this article are net of fund expenses and include reinvested dividends.
HGER has outperformed SPY recently as oil prices have spiked as a result of the conflict between the U.S., Israel and Iran.
You can see how the performance of HGER was differentiated from that of the U.S. benchmark large-cap stock index even before the Iran conflict. The S&P 500's decline during April 2025, as President Donald Trump made his first wave of tariff announcements, was an example.
Early on Wednesday, continuous front-month contracts for West Texas Intermediate crude oil (CL00) were trading for $94.63 a barrel on the New York Mercantile Exchange, down 1.6% from Tuesday's settlement price but up 41% from $67.02 on Feb. 27, the day before the U.S. and Israel attacked Iran. During 2025, WTI's average daily settlement price for continuous front-month contracts was $64.72.
According to Gleich, HGER is "overweight refined commodities and underweight unrefined commodities" when compared with the Bloomberg Commodity Index.
"There is a time lag in which refiners will struggle for input in one to two months, which puts an immediate premium to refined products now," he said. Gleich added that Harbor's own research had shown refined fuels to be a better inflation hedge than crude oil.
A longer-term inflation shift
The spot price of gold (GC00) early Friday on the New York Mercantile Exchange was $4,896.60 an ounce, up 61% from a year earlier and up 126% from two years earlier. Gleich said HGER had been "overweight gold because debasement concerns were dominant," but that gold prices more recently had been consolidating.
Debasement refers to investors' and traders' concerns about the value of the dollar and other currencies. It has been "driven by a number of factors, including an eroding faith in global institutions, the rise of populism and the increase in fiscal deficits," Gleich said.
But inflation can also be caused by the scarcity of commodities.
"We are transitioning from strictly a debasement inflationary environment to one that is more balanced between scarcity and debasement," Gleich said.
And that fits with a focus on consumables, which, for energy, means more weighting in refined products and less weighting in crude oil.
Fund performance compared with peers
The Harbor Commodity All-Weather Strategy ETF has an expense ratio of 0.68%, which means annual fees totaling $68 for a $10,000 investment.
LSEG lists 25 ETFs that are peers to HGER, and 19 of these have existed for at least three years.
Since the standard benchmark index for commodity funds is the Bloomberg Commodity Index, the following list of competing exchange-traded funds begins with two that track BCOM. These are the iPath Bloomberg Commodity Index Total Return ETN DJP and the abrdn Bloomberg All Commodity Strategy K-1 Free ETF BCI.
Following those three funds are the five that showed the highest average three-year returns through February. The last trading day of that month was Feb. 27. The U.S. and Israel began their attack on Iran on Feb. 28. So the table includes returns from Feb. 27 through Wednesday and for 2026 through Wednesday.
Fund Avg. 3-year return through February Return from Feb. 27 through March 17 2026 return through March 17 Net expense ratio Launch Date Harbor Commodity All-Weather Strategy ETF 15.5% 9.4% 24.7% 0.68% 2/9/2022 iPath Bloomberg Commodity Index Total Return ETN 10.3% 10.9% 25.9% 0.70% 6/6/2006 abrdn Bloomberg All Commodity Strategy K-1 Free ETF 9.3% 9.9% 22.7% 0.26% 3/30/2017 USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund 16.9% 9.1% 20.8% 0.60% 5/3/2018 United States Commodity Index Fund 16.4% 9.1% 20.0% 1.10% 8/9/2010 WisdomTree Enhanced Commodity Strategy Fund 14.6% 4.7% 15.4% 0.55% 12/21/2020 VanEck Commodity Strategy ETF 14.6% 16.7% 34.9% 0.55% 12/20/2022 First Trust Global Tactical Commodity Strategy Fund 10.7% 12.4% 23.5% 0.98% 10/22/2013 Source: FactSet
The net expense ratios shown in the table match the funds' full expense ratios, except for the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund SDCI, which has a full expense ratio of 0.80% but is waiving 0.20% of expenses until at least Oct. 31.
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March 18, 2026 10:31 ET (14:31 GMT)
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