Investing in commodities can be extremely difficult for ordinary investors. Many commodities aren't tradeable in physical form in any practical sense, and even those that are can involve storage costs and risk of loss from holding the physical commodity. In response, exchange traded fund companies came up with commodity ETFs to make it easier for investors to get exposure to commodities in their portfolio. The following five ETFs have gathered the most assets from investors and offer a range of approaches toward investing in the commodity space.

Commodity ETF

Assets Under Management

Expense Ratio

5-Year Average Annual Return

PowerShares DB Commodity Index Tracking (NYSEMKT:DBC)

$1.8 billion

0.89%

(10.9%)

iShares S&P GSCI Commodity-Indexed Trust (NYSEMKT:GSG)

$1.1 billion

0.75%

(14.5%)

iPath Bloomberg Commodity Index Total Return (NYSEMKT:DJP)

$748 million

0.70%

(10.9%)

United States Commodity Index (NYSEMKT:USCI)

$474 million

1.11%

(8.6%)

PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (NYSEMKT: PDBC)

$426 million

0.60%

(14.2%)*

Data source: Fund providers. * Since inception date of Nov. 7, 2014.

Which commodities do you want?

The primary difference among this five commodity ETFs is the particular mix of commodity exposure that they offer. Most of the ETFs track different benchmarks, and so they have slightly different allocations to various commodities.

The PowerShares DB Commodity Index Tracking fund is the largest by assets, and it has a decided focus toward energy. About 54% of the fund's assets are invested in crude oil, gasoline, heating oil, and natural gas futures. Crops like wheat, soybeans, corn, and sugar make up another 22% of fund assets. Metals cover the remaining 24%, with precious metals getting a 9.5% allocation and base industrial metals like zinc, copper, and aluminum making up the remainder.

The iShares commodity fund tracks the S&P GSCI commodity index, which has slightly different weightings. Energy products get a 56% allocation, with agricultural crops getting 20% of the fund. However, metals only get about 16% of the portfolio. Taking its place is an 8% allocation to livestock, which the PowerShares fund omits.

Corn harvested.

Image source: Getty Images.

The iPath exchange traded product takes yet a different tack on commodity exposure. Gold and silver combine to make up 17% of its portfolio, and base metals add another 18%. Energy gets a relatively small 28% allocation, and grain exposure comes in at 23%. Livestock has a 7% exposure, and other soft commodities make up 6% of the portfolio.

An equal weight approach

The United States Commodity Index fund uses a slightly different methodology by making roughly equal-weight investments in 14 different commodity futures contracts. Metals make up about half the portfolio, with gold being the only precious metal, joined by nickel, lead, tin, zinc, copper, and aluminum on the industrial side. Energy gets only a one-seventh weighting with gasoline and natural gas futures, while the agricultural realm gets the remainder, including cotton and soybean oil on the crop side and lean hogs, live cattle, and feeder cattle on the livestock side. It's evident how the relative lack of energy exposure has improved the fund's performance compared to its peers.

A twist on commodity exposure

Finally, PowerShares came out with another commodity fund more recently that uses a combination of futures and swap contracts to get exposure to various commodities. Futures make up only about 30% of the fund's holdings, with swaps representing the remaining 70%. By focusing on the futures market dynamics, the fund hopes to maximize the return available from rolling contracts into future months. That approach leaves the fund exposed to the same downward trends in commodity prices as its peers, but over time, it could help make up for part of the shortfall and add to performance during bull markets for commodities.

Which commodity does ETF belong in your portfolio?

The environment for commodities in recent years has been bad, and none of these ETFs have generated positive returns for their shareholders. Nevertheless, portfolio diversification makes commodities a useful asset to consider. Depending on which commodities you think have the most promise, picking the ETF that has the ideal balance for your investing thesis can help you improve the risk-reward equation for your portfolio going forward.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.