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- $1.3 billion of assets invested into European broad commodity ETFs in first quarter of 2017
- The Source Bloomberg Commodity UCITS ETF is the fastest-growing European ETF of the last five years
- The fund is now available in GBP on London Stock Exchange
European investors have continued to increase their commodity exposure, with $1.3 billion going into broad commodity ETFs in the first quarter of 2017. This is quickly approaching the $1.8 billion invested in the whole of 2016, which was itself a strong year for commodities.
Chris Mellor, product specialist at Source, explained, “It’s clear that investors wanting to diversify their portfolios are turning to commodities. That makes sense given the low correlation commodities have with equities and bonds, and especially now that some equity valuations may look stretched.”
The vast majority of this year’s broad commodity flows have been into ETFs tracking the Bloomberg Commodity Index (“BCOM”), with the Source Bloomberg Commodity UCITS ETF raising over $1 billion since its launch in January 2017. This made it the most successful ETF launch in the past five years.
Investors interested in the fund now have a choice between GBP and USD trading currencies, both now available on the LSE. With a total cost of only 0.40% per annum (an ongoing charge of 0.19% and swap fee of 0.21%), the fund is cheaper than other broad commodity ETFs.
Mellor continued, “Investors have been crying out for a more competitively priced, simple commodity ETF. Prior to this launch the lowest cost commodity ETF in Europe had an ongoing charge of 0.35% and a total cost of 0.75% per annum, almost twice as much as our fund.”
