Key Takeaways

• Investors have put roughly $28 into bond funds for every $1 into commodity funds since 1997.
• Commodity allocations have never topped 2% of fund assets and sit near 0.9% today.
• Passive index funds have quietly cut real asset exposure, with energy falling from roughly 18% of the S&P 500 to near 4%.

Investors have spent three decades pouring money into stocks and bonds while largely ignoring commodities and other real assets. At the same time, the traditional equity portfolio has become increasingly concentrated in a handful of financial and technology companies.

That creates an unusual setup: many investors hold less intentional exposure to the physical economy at a time when portfolio concentration has been rising. This is the first post in a four-part series on real assets. We start with the simplest question: how did investors get so little exposure to them in the first place?

Commodity Fund Growth: $188B in Three Decades

Since July 1997, U.S. taxable bond funds have absorbed roughly $5.3 trillion in cumulative net flows. U.S. equity funds have taken in about $1.1 trillion. Commodity funds have taken in $188 billion - in total across 29 years.

In other words, for every dollar that found its way into a commodity fund, roughly $28 went into a bond fund.

Commodities Have Been Chronically Under-Owned

U.S. Fund Category Cumulative Net Flows

Source: Morningstar. Data as of June 30, 2026. Past performance is no guarantee of future results.

Commodity Performance Across Drawdowns

What stands out is the flatness of the line across an entire generation of markets. That span includes the commodity supercycle of the 2000s, the post-crisis reflation trade, the inflation shock of 2021 and 2022, and the metals rally that followed. Through all of it, commodity flows never inflected and commodity ownership never really became a durable part of investors’ portfolios.

Investor Behavior in Commodities

While flows tell us what investors are currently buying into, allocations tell us what they hold onto. On that measure the picture is arguably worse.

Commodities reached roughly 2.0% of total fund assets, excluding money market funds, in 2011. By 2015–2019, that share had fallen to roughly 0.5%. As of mid-2026, it sits near 0.9%, after briefly reaching 1.2% earlier this year.

Commodity Category % Total Assets (ex. Money Market Funds)

Source: Morningstar. Data as of June 30, 2026.

Timing the Commodities Cycle Falls Flat

Commodity ownership behaves as a series of spikes rather than a rising baseline. Investors tend to arrive after prices have already moved and leave once momentum fades. In nearly two decades of data, commodities have never established a durable seat at the allocation table.

A 2% allocation has been the ceiling, that covers everything in the category: gold, broad baskets, single commodities, and the funds that hold them.

How Has Real Asset Ownership Shifted?

The under-ownership problem is amplified by what investors own. Passive index funds are among the most widely held vehicles, and their sector exposures have shifted materially over the years.

Real asset sectors have structurally shrunk as a share of the S&P 500. Energy averaged roughly 18% of the index in the 1980s. It sits near 4% today. Materials and real estate together add only a few points more. Technology has moved in the opposite direction, from roughly 5% to roughly 28% on a decade-average basis.

Average Historical Sector Weights of S&P 500

Source: VanEck. Data as of June 30, 2026. 2020s reflects the 2020 to 2026 year-to-date average. The 2018 GICS reclassification moved Alphabet, Meta and Netflix into Communication Services, which inflates that sector relative to earlier decades. Pre-1999 figures are estimates derived from historical financial data.

Some of that shift reflects genuine changes in the composition of the U.S. economy. But part of it is simply the arithmetic of market-cap weighting. Sectors that underperform get smaller in the index whether or not their economic role has changed. The consequence is that an investor building a portfolio from a core equity fund and a core bond fund is starting from less real asset exposure than at any point in the modern era, and whether they intended to or not.

Why Investors Should Diversify with Commodities

Persistent under-ownership might be easy to dismiss if the case for the asset class had weakened — but the historical diversification characteristics have largely held. Over the past 30 years, commodities have shown low correlation to nearly everything else a portfolio holds.

Commodities Add Low Correlation and Diversification

Commodities: 30-Year Correlation vs. Equities and Bonds

Source: VanEck, Morningstar. 30-year correlations based on monthly returns. Data as of June 30, 2026.

Commodities Correlation Explained

Commodities have carried a 0.44 correlation to international stocks, 0.33 to U.S. stocks, 0.30 to international bonds, 0.21 to U.S. technology stocks, and 0.00 to U.S. bonds.

The relevance of that has grown as equity benchmarks have become more concentrated. Information technology alone accounted for 37.9% of the S&P 500 as of August 31, 2026, according to S&P Dow Jones Indices. An investor who holds a total U.S. equity fund today holds a very different risk exposure than one who held the same product 20 years ago, and much of that risk now traces back to a single theme.

While correlations can rise sharply during liquidity shocks, over long periods, the numbers show that commodities have historically behaved differently from the stocks and bonds that make up most portfolios, a potentially important factor for allocators seeking diversification.

Are Real Assets Undervalued?

The reason to own real assets isn't simply that other investors don't. It's that most portfolios already have plenty of exposure to stocks and bonds, and not much to the things that drive the physical economy—energy, materials, commodities, infrastructure and land. Real assets bring a different set of risks and return drivers to the portfolio, and that can matter when stocks and bonds don't behave the way investors expect. After decades of owning less of the real economy, it may be worth asking whether portfolios have gone too far in the other direction.

VanEck Natural Resources and Commodities Solutions

VanEck has a history of investing in natural resources and commodities for over 50 years, offering investors actively and passively managed strategies, from physical commodities to natural resource equities. We offer specialized exposure to individual sectors and diversified solutions with broad exposure across sectors and industries.

More information, including recent performance and current holdings, can be found by clicking the fund names below:

Global Resources Fund: Actively-managed approach to companies with unique competitive advantages associated with traditional commodities and those leading the development of emerging resource applications and technologies.

International Investors Gold Fund: Proven fundamental, bottom-up process emphasizes stock selection based on industry experience to access opportunities across the gold mining sector.

CM Commodity Index Fund: A passively managed fund that offers diversified commodities exposure by spreading its exposure across multiple maturities and maintaining a constant maturity per commodity to mitigate the impact of negative roll yield.

CMCI Commodity Strategy ETF: A passively managed ETF that spreads its exposure across multiple maturities to offer diversified exposure and mitigates the impact of negative roll yield by maintaining a constant maturity per commodity.

VanEck Oil Refiners ETF (CRAK): Provides exposure to an industry that may generally benefit from lower oil prices, a segment that has historically interacted differently with oil prices and market dynamics than other energy segments.

VanEck Energy Income ETF (EINC): Offers exposure to MLPs and energy infrastructure companies that have historically exhibited attractive yield characteristics without burdensome K-1 tax reporting.

VanEck Gold Miners ETF (GDX): The nation's first ETF to offer direct exposure to the gold mining industry. Gold miners have historically shown leverage to gold prices, which can amplify returns when prices rise and losses when they fall.

VanEck Junior Gold Miners ETF (GDXJ): Access to junior gold miners, including smaller exploratory or early development phase companies that are responsible for many gold reserve discoveries worldwide.

Copper and Electrification ETF (EMET): Capture companies involved in the production of the metals that enable the energy transition from fossil fuels to cleaner energy sources and technologies.

VanEck Natural Resources ETF (HAP): Offers exposure to global companies involved in six natural resources segments (including agriculture, energy, metals and renewable energy).

VanEck Agribusiness ETF (MOO): Positioned to meet growing demand as global population growth is driving increasing food demand and the need for efficient agricultural solutions.

VanEck Uranium and Nuclear ETF (NLR): Access to an important segment of the nuclear energy market, which is a significant clean energy source at an inflection point from increasing demand.

VanEck Oil Services ETF (OIH): Invests in highly liquid companies in oil services industry, including both domestic and U.S. listed foreign companies, allowing for enhanced industry representation.

VanEck Merk Gold ETF (OUNZ): Provides investors with a convenient and cost-efficient way to invest in gold through shares with the option to take physical delivery.

VanEck Real Assets ETF (RAAX): Comprehensive allocation strategy that invests across real assets and seeks to reduce volatility by responding to changing market environments.

VanEck Rare Earth and Strategic Metals ETF (REMX): Provides access to the rare earth or strategic metals industry, which supplies key inputs to many of the world’s most advanced technologies.

VanEck Steel ETF (SLX): Access to the steel industry, an industry supporting global industrialization and economic expansion.

VanEck Low Carbon Energy ETF (SMOG): Exposure to low carbon energy that includes not only solar, wind and hydro companies, but also in more recently developing areas of the market such as electric vehicles, battery tech, hydrogen and fuel cells.

VanEck Commodity Strategy ETF (PIT): Actively managed exposure to a broad basket of commodity futures.

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