JPMorgan chief global market strategist Marko Kolanovic advises investors to play commodities against recession risks. “It looks like a good starting point to catch up on commodities versus equities – amid broad-based gains in risk assets, commodity prices have the highest downside risk to date and are strikingly undervalued, undervalued, and backed by compelling technical and fundamentals,” he wrote in a note Monday. Kolanovic considers natural gas to be his first choice in the commodity sector. Investors can look to the US Natural Gas Fund LP (UNG) for exposure to commodities; it will fall about 48% in 2023. The strategist forecasts US natural gas prices to rise 25% over the next few months on expectations of a supply growth reversal. His second favorite commodity investment pick is agricultural commodities. The Invesco DB Agriculture Fund (DBA), growing by nearly 11% in 2023, allows investors to enter the sector. The fund offers exposure to a wide range of agricultural futures, including sugar, soybeans and corn. The strategist also calls oil his third favorite sector. The US Brent Oil Fund LP (BNO), down below 1% in 2023, is one way for investors to get into the sector. Investors buying commodity-focused ETFs should be aware that funds that invest in futures contracts tied to these assets may see fluctuations in returns due to events such as contango and pullback. Contango is a situation in which futures contracts with a further date are priced above the spot price. Backwardation is what happens when the spot price is higher than the price of the upcoming futures contracts. To be sure, Kolanovic maintains a neutral stance on base metals. “For base metals to fully participate in the tactical rally in the second half of 2023, we may still need an additional catalyst, whether stronger Chinese stimulus or strengthening global manufacturing PMI, to underpin stronger demand expectations,” Kolanovic said. —Michael Bloom of CNBC contributed to this report.