I want to introduce you to an exchange-traded fund (ETF) that gives you access to commodities that offer an appealing investment opportunity right now. Key reasons for an ongoing surge in commodity prices include unrest in the Middle East and heightened demand for food from population growth in Asia. The PowerShares DB Commodity Index Tracking Fund (DBC) gives you exposure to the best that commodities have to offer through oil, precious metals and agriculture.

With commodities continuing to climb, you may regret staying on the sidelines if you are not invested in any of them. If you already are invested in commodities, this fund is one that you may want to keep in mind for future use, or to add to your existing positions.

DBC is based on the DBIQ Optimum Yield Diversified Commodity Index Excess Return and is managed by DB Commodity Services LLC. This is a rules-based index composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world. Since you cannot invest directly in the index, DBC is the best way to access all that the index offers.

As you can see from DBC’s chart below, commodities have made a huge run higher lately.

A key driver of the fund’s increased share price is the public upheaval in the Middle East and Northern Africa. The protests began in Tunisia and later erupted in Egypt, where President Hosni Mubarak ultimately responded by stepping down. Most recently, citizens took to the streets in Libya, a significant oil producer, to oppose dictator Muammar Gaddafi. The conflict has escalated in recent days with armed rebels and troops loyal to the country’s leader fighting for control of territory. The production of crude oil has been disrupted amid the turmoil in Libya. In addition, the push for democracy in that part of the world may spread. I love democracy as much as anybody, but keep in mind that markets typically fall in the midst of political uncertainty.

Commodity prices generally are an exception, and that’s why the sector offers a way to profit during such times. The rise in oil prices in recent weeks has been dramatic. Oil prices climbed above the $100 a barrel mark on the New York Mercantile Exchange on Wednesday, Feb. 23, for the first time since October 2008. Also on Feb. 23, Brent crude on the ICE futures exchange hit a 2 ½-year high of nearly $120. Brent crude oil prices pulled back in the following days but are rising again to surpass $117 today. West Texas Intermediate (WTI) crude oil prices have topped $102 today. The climb shows that the jump is far from a fleeting move. Expect oil prices to continue trending higher, if people in more Middle Eastern countries take to the streets to publicly oppose their leaders.

Increased oil prices mean higher costs for gasoline and for raw materials used in food production. As a result, rising oil prices generally cause stock market weakness. That situation is occurring right now.

Other commodities that have been climbing in price in the wake of the Middle East protests are precious metals. Investors are buying precious metals as a safe haven from equity markets. Gold climbed past $1,400 to close above $1,420 yesterday and reached $1,438 earlier today. Silver closed up yesterday at $34.69 per ounce and rose further today to approach $35 per ounce.

Finally, another trend I’ve been watching in commodities is increased food prices around the world. There has been a rise in world agricultural inflation, much like we saw in 2008. Due partly to difficult weather conditions and a huge increase in demand, especially from Asia, prices for wheat, corn, soybeans, sugar and other agricultural products have jumped.

Below you will find DBC’s top-10 holdings. You probably will notice that DBC has significant exposure to oil and oil-related commodities, as well as access to precious metals. Among its lesser holdings not shown below, you will find access to agricultural products such as soybeans, corn and wheat.

The fund’s top-10 holdings, as of March 1, 2011, are below:

I need to warn you that commodities and futures can be extremely volatile and might not be suitable for all investors. Nonetheless, DBC has performed very well lately when so many other investments have fallen along with the stock market generally.

For advice about which ETFs to buy and to sell, I urge you to sign up for my ETF Trader service. As always, I am pleased to answer any of your questions about ETFs, so don't hesitate to contact me if you have one. To send a question to me, simply click here. You may see your question answered in a future ETF Talk.