Commodity Exposure Without Futures? Start Here

Understanding the VanEck Natural Resources ETF (HAP)

The VanEck Natural Resources ETF (HAP) has become a popular choice for investors seeking exposure to commodities without the complexities of futures contracts. Currently trading at $73, HAP has delivered impressive returns over the past year, with a 52% gain and a 216% return over ten years. This performance highlights its ability to provide inflation-resilient exposure across six key commodity themes: agriculture, energy, renewable energy, industrial metals, precious metals, and forest products.

Instead of directly investing in futures, which can be challenging due to roll management and K-1 tax forms, HAP invests in equities that represent companies involved in extracting, growing, refining, or generating power from these resources. This approach offers investors a more straightforward experience with a 1099 form instead of a K-1, making it easier to manage taxes and avoid the headaches associated with futures trading.

The Volatility of WTI Crude

The price movements of WTI crude oil illustrate the volatility that drives investors toward commodity-linked equities. For instance, WTI crude touched $114.58 per barrel on April 7, 2026, before dropping to $99.89 by April 27, showcasing a significant swing within three weeks. Such fluctuations can be daunting for those looking to invest directly in futures, as they involve challenges like roll yield, contango, and the need to manage expiring contracts.

HAP provides an alternative by focusing on the companies that operate in the natural resources sector. This allows investors to benefit from the operating leverage of producers when prices rise, while also being exposed to the risks associated with equity market sell-offs and cycle sensitivity.

The Role of HAP in a Diversified Portfolio

HAP is designed to fill the "hard assets" slot in a diversified portfolio, offering inflation resilience and participation in the long-term demand for energy, metals, and food. With the Consumer Price Index (CPI) at 330.3 in March 2026, which is in the 90th percentile of its 12-month range, the appeal of HAP has grown significantly.

The fund generates income through cash flow from selling commodities at favorable prices, the repricing of reserves, and tight supply due to capital expenditure cycles. It includes both legacy energy sources and renewable energy projects, capturing the evolving landscape of resource extraction and utilization.

The Numbers Behind the Pitch

HAP's performance metrics are compelling. Trading around $73, it has shown a 52% one-year gain, a 21% year-to-date return, and a 216% ten-year return. These figures highlight its ability to navigate different market conditions, including the challenging period from 2015 to 2020 and the subsequent recovery driven by inflation.

With the 10-year Treasury yielding 4%, which is in the 83rd percentile of its trailing year, real assets like HAP are competing against a respectable risk-free rate. HAP’s success in 2026 was largely due to strong commodity prices and the response of resource equities through operating leverage. However, in a scenario where rates fall and commodities stagnate, the dynamics could shift.

Key Considerations Before Investing

Before considering a position in HAP, it's essential to understand three key constraints:

• Equity Beta Still Rules in a Sell-Off: When the broader market panics, resource stocks often follow, even if the underlying commodity holds up. HAP, as a hard-assets equity sleeve, may exhibit correlations that fade during market downturns.

• Concentration in Mega-Producers: Cap-weighted natural resource indexes tend to favor the largest integrated oil majors and mining giants. While HAP diversifies across six sub-themes, the top names still drive most of the variance.

• Cycle Sensitivity Cuts Both Ways: The same operating leverage that contributed to HAP's 52% one-year gain can work against investors during commodity downturns. Sequence-of-returns risk is a critical factor for those relying on income from this investment.

HAP as a Strategic Investment

HAP is well-suited as a 5% to 10% inflation-resilient sleeve for investors seeking broad commodity-linked equity exposure in a 1099 wrapper. The primary risk lies in the fact that commodity equities still trade like equities when markets get rough.

If you've been thinking about retirement, it's crucial to pay attention to your financial planning. Retirement doesn't have to feel overwhelming, and finding expert guidance can make all the difference. SmartAsset’s simple quiz helps you connect with vetted financial advisors, making it easier than ever to start building the retirement you’ve always dreamed of.

Steps to Get Started

1. Answer a few simple questions
2. Get Matched with Vetted Advisors
3. Choose Your Fit

Why wait? Start building the retirement you’ve always dreamed of. Get started today!