Commerzbank cross-lists Comstage ccy-hedged ex-agri commodity ETF on SIX

Jan 30th, 2018 | By | Category: Commodities

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Commerzbank has cross-listed the ComStage CBK Commodity ex-Agri Monthly EUR Hedged UCITS ETF (CBACOM SW) on Zurich’s SIX Swiss Exchange, providing exposure to a basket of commodity futures excluding agriculture.

Commerzbank cross-lists Comstage currency-hedged commodities ETF on SIX

The fund provides exposure to 12 commodities from the energy, precious metals, and industrial metals sectors.

The fund trades in euros and employs a monthly currency hedge to mitigate the risk of currency fluctuations against the US dollar.

Underlying the fund is the Commerzbank Commodity ex-Agriculture Monthly EUR Hedged Index which tracks the performance of four ‘most important’ commodities within each of the energy, precious metals and industrial metals sectors.

Specifically, the index consists of futures contracts for the following 12 individual commodities: WTI crude oil, Brent crude oil, gas oil, natural gas, gold, silver, platinum, palladium, copper, zinc, nickel and aluminium.

Each commodity is equally weighted in the index which is rebalanced twice per year.

The ETF is 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.

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.

Research shows, however, that the degree of inflation-protection varies by commodity. In general, commodities which are storable tend to provide a better hedge. In this way, the Comstage product may be better suited for investors seeking this type of protection, given that agriculture commodities (typically perishable, non-storable) are excluded.

The exclusion of agriculture will also appeal to investors concerned about the impact of financial speculation in agriculture futures markets on general food prices.

The index has returned 13.1% over the past year with volatility of 11.5% over the same period (Data as of 25 January 2018).

The fund’s total expense ratio (TER) is 0.35%. It is also available to trade on London Stock Exchange or Deutsche Börse in euros, under the ticker codes 0E3T LN or C099 GY. There is a little over €200 million assets under management across these listings.

There are a few broad commodity (ex-agriculture) exchange-traded products available in Europe such as the ETF Securities‘ ETFS Ex-Agriculture and Livestock ETC (OOEC GR) which has $76m in assets and a management fee of 0.49% plus swap costs.

Other options include the Lyxor Commodities Thomson Reuters/CoreCommodity CRB EX-Agriculture TR UCITS ETF and the UBS CMCI ex-Agriculture SF UCITS ETF.

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