Zurich, Switzerland

Commodities are entering the gates of a “bubble.” But that doesn’t mean you still can’t make money before the curtains come falling down sometime over the next few years. A protracted period of easy U.S. and European monetary policy combined with weak currencies in the United States and the eurozone probably assure further gains for raw materials.

Most commodity ETFs and ETNs aren’t cheap. Futures prices for most U.S.-traded commodities are selling at a premium to spot prices (e.g. contango) and whether they like it or not, investors are paying for the privilege to own this asset class. Rollover premiums are getting more expensive each month. And that means higher costs for the ETF or ETN you’re considering.

One fund has discovered a way to get around this anomaly by avoiding to pay most of the rollover premium. The Greenhaven Continuous Commodity Index Fund (NYSE-GCC) holds up to six different futures contracts in each of 17 equally-weighted commodities. The fund has seen a big influx of new cash and is already trading at a 52-week high.

To avoid paying most, but not all of the contango premium upon rollover, the fund seeks to identify the best deal among a host of contracts and thereby limiting its number of rolls each year. I think this strategy is currently the best deal for the retail investor.

At this stage of the bull market, I’d be looking to mix my commodities allocation with natural resource equities that pay dividends (see large-cap U.S. and European oil majors), gold stocks and index funds. But the only ETFs or ETNs I’d buy now are GCC and JJG. That’s it. The rest are getting more expensive by the day.