European investors put almost $2 billion into broad commodity ETFs last year, but they may not be getting value for money. A new ETF from Source aims to track the well-known Bloomberg Commodity Index (“BCOM”), at around half the cost of some competing funds…
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“Commodity markets picked up in 2016, so it wasn’t a surprise to see new assets in broad commodity ETFs,” says Source’s Chris Mellor. “However, it is surprising how high the fees are on some broad commodity ETFs.” The Source Bloomberg Commodity UCITS ETF offers very efficient exposure, at a total cost of only 0.40% per annum (ongoing charge of 0.19% and swap fee of 0.21%). BCOM is one of the most popular commodity benchmarks, launched in 1998 and covering 20 different commodities.
This ETF is the latest addition to our range of “portfolio essentials”, which includes benchmarks like S&P 500 and EURO STOXX 50 at some of the lowest prices in the market. “It’s not just about cost,” adds Mellor. “These funds are completely transparent and give you precise tracking that few other providers can match.” Unlike many other providers, we disclose all fees in advance, so you can anticipate how each fund will perform relative to the index.
Source already has a strong track record in commodities, with one of Europe’s largest gold products and a broad “smart beta” ETF. “As always, some investors want the standard benchmark and others want something more sophisticated,” says Mellor. “We now offer both. Source has now more than $4 billion in commodity products, including the new BCOM ETF and our existing LGIM Composite ETF which has steadily grown to over $300 million”.
|Name||Source Bloomberg Commodity UCITS ETF|
|Benchmark||Bloomberg Commodity TR Index|
|Base and trading currency||USD|
|Bloomberg ticker||CMOD LN|
(1) Includes management fees, custody and administration costs but excludes transaction costs such as swap costs
(2) Previously called the Dow Jones-AIG Commodity Index