ETF Securities has launched a suite of broad market ETFs on NYSE Arca which are designed to track the popular Bloomberg Commodity Indices, a family of liquid and diversified indices, giving investors exposure to global commodities.
According to ETF Securities, the newly launched commodity ETFs are the lowest cost available within their respective categories.
The three funds in the suite follow commodities that were previously out-of-reach for many investors or only available through costly structures with cumbersome K-1 tax form filing requirements. The new, more investor-friendly format eliminates the K-1 tax issue by relying on a ’40 Act structure.
“We have listened to investors’ needs and responded by offering inexpensive, tax-efficient ETFs that deliver broad commodity exposure in a simplified and modernized product,” said Steven Dunn, Executive Director and Head of US Distribution at ETF Securities. “As the third largest ETP commodity provider in the world, it only made sense that ETF Securities spearhead the development of these funds, building on our long history of innovation, and democratizing access to commodities for investors.”
The new launches, all of which trade in US dollars, and their corresponding total expense ratios (TERs) are:
ETFS Bloomberg All Commodity Strategy K-1 Free ETF (BCI). TER – 0.29%
ETFS Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD). TER – 0.29%
ETFS Bloomberg Energy Commodity Longer Dated Strategy K-1 Free ETF (BEF). TER – 0.39%
BCI tracks the Bloomberg Commodity Index, consisting of 22 commodities from the agriculture, energy, industrial metals, precious metals and livestock sectors. Commodities within the index are weighted two thirds by trading volume and one third by world production with an additional criteria of global economic significance. A sector cap of 33% is applied to limit overconcentration.
BCD tracks the Bloomberg Commodity Index 3 Month Forward Index, which is almost identical to BCI’s underlying index except constituent futures contracts are three months ahead of the standard contract calendar.
BEF tracks the Bloomberg Energy 3 Month Forward Index, composed of crude oil, heating oil, unleaded gasoline and natural gas with futures contracts three months ahead of the standard contract calendar.
According to ETF Securities, the funds are the lowest cost ETFs available within their respective categories.
“Investors are increasing their exposure to commodities as we reach the longest commodity rally in five years,” said Alan Campbell, Global Product Manager, Bloomberg Indices. “They need access to quality data that tracks where prices are moving and the subsequent impact to their portfolios. We’re pleased to extend our relationship with ETF Securities in the US to help provide efficient access and diversified exposure to the commodities market.”