Source’s new commodity ETF reaches $925m in assets in first three weeks

Feb 6th, 2017 | By | Category: Commodities

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Unveiled just three weeks ago, the Source Bloomberg Commodity UCITS ETF (LON: CMOD) has reached $925m in assets under management, becoming the fastest-growing European ETF of the last five years.

New Source Commodity ETF records $925m inflows in first three weeks

Chris Mellor, Executive Director, Product Management, at Source.

Factors driving interest in the fund include the popularity of the underlying Bloomberg Commodity Index, a rebound in global commodity markets during 2016, and fund fees of just 0.40%, the lowest charges of any broad commodities ETF. The fees comprise an ongoing charge of 0.19% and a swap fee of 0.21%.

Chris Mellor, Executive Director, Product Management at Source, observed: “Investors have been crying out for a more competitively priced, simple commodity ETF and the rapid growth in Source’s new ETF reflects this. Prior to this launch the lowest cost ETF tracking a first-generation commodity index had an ongoing charge of 0.35% and a total cost of 0.75%, almost twice as much as our new fund.”

Launched in 1998 and covering 20 different commodities, the Bloomberg Commodity Index has become a leading benchmark for the broad commodity market. It is well diversified and contains components in the agriculture (currently 26.8% index weight), energy (38.8%), industrial metals (16.9%), precious metals (13.3%) and livestock (4.2%) sectors. The index caps (max 15%) and floors (min 2%) the exposure of any one commodity in the index, resulting in a more balanced index weighting.

In order to maintain commodity exposure, the index rolls near-term futures contracts every two months over a 5-day roll period.

It returned 12.0% in 2016.

Source currently manages over $4.5bn in assets across all commodity exchange-trade products and $23bn across its entire ETP range, which also includes equity, fixed income and alternative products.

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