27
Thu, Jul

ETF UK
Typography

Investor demand for commodities remains high with over US$6.3 billion invested in commodity ETPs in Europe YTD.....

    New broad commodity UCITS ETFs are in response to increasing demand for investments in alternative asset classes.

    Commodities allocation can offer a hedge against inflation and a source of uncorrelated returns for long-term portfolio positioning

ETF Securities has today listed two new broad commodity Exchange Traded Funds on the London Stock Exchange, tracking two indices from the Bloomberg Commodity Index family.

New flows into commodity ETPs in Europe stand at US$6.3 billion to date2. Gaining exposure to commodities has become increasingly important as investors become more familiar with the role of raw materials in supporting global growth. Commodities tend to have a positive correlation with inflation which can be attractive to certain investors. During periods of high inflation and equity market downturns, commodities have historically outperformed most other asset classes and provided some protection against downside macroeconomic risks.

 “Knowledge of the longer-term benefits as well as the understanding of uncorrelated risk contribution by this asset class has increased. With the demand for a well-diversified commodities exposure continuing to grow, we are focused on providing investors with a wider range of broad commodities solutions with a particular focus on efficient transaction costs to help reduce the cost of investing in this asset class,” says Howie Li, CEO of Canvas, ETF Securities.

The two new ETFs are designed for investors who want ‘all-in-one’ access to commodities for growth and diversification, but who wish to avoid the challenges of navigating several sub-sectors themselves via futures.

The two new ETFs are:

    ETFS All Commodities GO UCITS ETF, which tracks an index of front month commodity futures and may be used as a tactical play, a core diversifier or part of an allocation to an alternatives portfolio.

    ETFS Longer Dated All Commodities Ex-Agriculture And Livestock GO UCITS ETF, which tracks an index of longer-dated commodity futures on energy and metals and is likely to appeal to investors seeking broad commodity exposure without an allocation to food-related commodities.

 

Security Listing curren ISIN Bloomberg Management fee

Swap  costs

Total costs
ETFS All Commodities GO UCITS ETF GBP
USD
IE00BF0BCP69 BCOG LN
BCOM LN
0.30% 0.05% 0.35%
ETFS Longer Dated All Commodities Ex-Agriculture And Livestock GO UCITS ETF USD
GBP
IE00BYQJ1388 XAGS LN
XAGG LN
0.30% 0.09% 0.39%

 

Source: ETFWorld

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