Tim Pickering, Lead Portfolio Manager and CIO at Auspice Capital, joined Keith Black, Managing Director of RIA Channel, to discuss commodity investments designed to reduce downside risk.
Auspice Capital has a long-term partnership with Direxion on the Auspice Broad Commodity Strategy ETF (COM). Pickering describes the Auspice Broad Commodity Strategy as commodity investing with airbags, allowing investors to participate in the upside returns of commodity markets while seeking to reduce exposure to downturns. Because commodities are a key driver of inflation, long positions in commodities tend to reduce the inflation risk inherent in a portfolio of stocks and bonds.
The strategy takes long positions in energy, metals, and ag commodities trending higher, while moving to flat positions during periods of price declines. Positions in each commodity are volatility-weighted, with position sizes declining as volatility rises. Futures positions are entered in the contract months that offer the best exposure to contango or backwardation. Commodity cycles are often long-lasting, as it takes many years to bring new supply of energy or metals to market. Pickering predicts that the current cycle could last another 10 years. Today, many investors remain near a record level of overweight in equities relative to commodity exposure.
Commodities are a highly diverse asset class, with relatively low correlations across energy, metals, and ag products. During the current broad commodity rally, the COM ETF has long positions in 11 commodities, with natural gas the only market showing a flat position signal. As gold and silver prices rallied throughout 2025, Auspice trimmed long positions in preparation for the eventual downturn.
Despite the growth of renewable energy, Pickering notes that geopolitical conflicts underscore the world’s continued need for reliable access to fossil fuels. The growing demand for AI is driving the need for commodities to construct and power data centers.
The grains and soft commodities tracked by the COM ETF include soybeans, corn, wheat, cotton, and sugar. While grain prices lagged the sharp increase in agricultural land prices for several years, grains are now starting to respond to these cost pressures.
Direxion will soon launch a fund combining equity exposure to the S&P 500 Index with the Auspice Managed Futures Index Strategy. Retail investors can now use this historically institutional “portable alpha” solution, seeking to add potential diversification and outperformance from the futures markets to a core equity market exposure.
WEBCAST – Energy, Geopolitics, and the New Commodity Paradigm
April 23, 2026 | 1:00PM ET
Global tensions are reshaping the landscape of energy and commodity markets. As trade alliances evolve and competition for essential resources intensifies, investors are compelled to reassess the role of commodities within a contemporary portfolio. Join Ed Egilinsky, Managing Director at Direxion, and Tim Pickering, founder of Auspice Capital Advisors, for an insightful discussion exploring how current geopolitical dynamics are influencing broader commodity markets, and why inflation has emerged as a persistent theme.
Key topics include:
- The impact of geopolitical tension on making energy a dominant force in today’s commodity markets.
- An examination of the catalysts expected to drive a robust bull cycle in commodities, including the growing influence of artificial intelligence.
- A look at how the Direxion Auspice Broad Commodity Strategy ETF (COM) manages risk, setting itself apart from industry peers.
- Before concluding, we’ll offer a brief overview of the Direxion S&P 500 Plus ETF (SPXP), an enhanced S&P 500 index strategy that combines traditional S&P 500 index exposure with a managed futures overlay, all within a single ETF package.
Don’t miss this opportunity to gain valuable perspectives on the changing dynamics of commodity investing in a rapidly evolving geopolitical environment.
Accepted for 1 CFP / IWI / CFA CE Credit
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