We’ve made no secret that we think Commodity ETFs are a poor choice for investors (see Commodity ETFs Suck – 2012 Edition), but we may have to revisit our premise with commodity ETFs ahead of the Dec futures performance through the end of March.

Are they getting more sophisticated in how they approach the markets? The short answer is yes – for example, some are now spreading their positions across multiple contract months in the hopes of improving performance. In addition, we’ve noted before that short-term changes in supply can give ETFs the advantage, which they’ve definitely seen in the first few months of this year.

Do we think the commodity ETFs will continue to outperform a simple strategy of buying the December contract and rolling it annually?  No.  Maybe they outperform for a month, a quarter, or even a year at some point. But they will still be rolling their positions many times more than a single annual roll, creating a drag in the form of cost and the roll yield.

Stay tuned.

Disclaimer: past performance is not necessarily indicative of future results.