NEW YORK, March 31, 2017 /PRNewswire/ -- ETF Securities, the largest global provider of Exchange Traded Funds (ETFs) tracking the Bloomberg Commodity Indices1, has launched a suite of commodity ETFs that are the lowest cost in their respective categories on the NYSE Arca.
The ETFS Bloomberg All Commodity Strategy K-1 Free ETF (BCI) range is among the most diversified commodity ETF suites in the US and is available in a K-1 free, '40 Act structure.
The range includes:
Total Expense Ratio
ETFS Bloomberg All Commodity Strategy K-1 Free ETF
ETFS Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF
ETFS Bloomberg Energy Commodity Longer Dated Strategy K-1 Free ETF
- Lowest cost diversified commodity ETFs in the US
- Offers access to the world's leading commodity index in an ETF format for the first time2
- Provided by one of the most experienced commodity Exchange Traded Product (ETP) managers in the world, including the largest provider of Bloomberg commodity products (over $4.34 billion USD3)
The three funds in the suite offer exposure to commodities that were previously out-of-reach for many investors or only available through costly structures with cumbersome K-1 tax form4 filing requirements. The new, more investor-friendly format not only eliminates the K-1 tax issue by relying on a '40 Act structure, but fundamentally alters the entire commodity ETF landscape.
"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 U.S. Distribution. "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 ETFs will track the Bloomberg Commodity Indices (BCOM), a family of liquid and diversified indices, giving investors access to global commodities.
BCOM is the world's leading benchmark for commodities, currently tracked by approximately $62 billion USD in assets. The benchmarks covers 22 commodity contracts weighted based on their liquidity, production value and economic significance. The benchmarks sets a cap on sector exposure at 33%, meaning the allocation to energy is less than other indices, creating a more diversified investor experience.
"Investors are increasing their exposure to commodities as we reach the longest commodity rally in five years. They need access to quality data that tracks where prices are moving and the subsequent impact to their portfolios," said Alan Campbell, Global Product Manager, Bloomberg Indices. "We're pleased to extend our relationship with ETF Securities in the U.S. to help provide efficient access and diversified exposure to the commodities market."
In 2003, ETF Securities listed the world's first physically-backed gold exchange-traded commodity (ETC). Two years later, ETF Securities created Europe's first oil ETC and in 2006 established the world's first commodities ETC platform.
More information about the Bloomberg Commodity ETF suite can be found by visiting www.etfsecurities.com/us.
1 Bloomberg as of March 2, 2017
2 Bloomberg as of March 2, 2017 based on assets tracking the Bloomberg Commodity Index family globally
3 Bloomberg as of March 2, 2017
4 K-1 tax form –similar to a partnership, S corporations must file an annual tax return on Form1120S.The S corporation provides a schedule K-1s that reports each shareholder's share of income, losses, deductions and credits.
About ETF Securities
ETF Securities U.S. is a specialist commodity ETP provider, backed by a global track record of innovation. Our approach is built on understanding investors' changing needs to construct accessible solutions, enabling them to diversify their portfolios beyond traditional asset classes and strategies. We produce timely and impactful market insights to support advisors, and their clients, in reaching informed investment decisions.
For further information, please visit: www.etfsecurities.com/us.
An investor should consider the investment objectives, risks, charges and expenses of the ETFs carefully before investing. To obtain a prospectus containing this and other important information, call 1-646-846-3130 or 844-ETFS-BUY (844-383-7289) or visit www.etfsecurities.com. Read the prospectus carefully before investing.
Fund Risk: There are risks associated with investing including possible loss of principal.
Commodities generally are volatile and are not suitable for all investors. There can be no assurance that the Fund's investment objective will be met at any time. The commodities markets and the prices of various commodities may fluctuate widely based on a variety of factors. Because the Fund's performance is linked to the performance of highly volatile commodities, investors should consider purchasing shares of the Fund only as part of an overall diversified portfolio and should be willing to assume the risks of potentially significant fluctuations in the value of the Fund.
Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. The Fund's return may not match the return of the index.
Through holding of futures, options and options on futures contracts, the Fund may be exposed to (i) losses from margin deposits in the case of bankruptcy of the relevant broker, and (ii) a risk that the relevant position cannot be close out when required at its fundamental value. In pursuing its investment strategy, particularly when rolling futures contracts, the Fund may engage in frequent trading of its portfolio of securities, resulting in a high portfolio turnover rate.
As a "non-diversified" fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of Shares may be more volatile than the values of shares of more diversified funds.
During situations where the cost of any futures contracts for delivery on dates further in the future is higher than those for delivery closer in time, the value of the Fund holding such contracts will decrease over time unless the spot price of that contract increases by the same rate as the rate of the variation in the price of the futures contract. The rate of variation could be quite significant and last for an indeterminate period of time, reducing the value of the Fund.
Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Subsidiary to operate as intended and could negatively affect the Fund and its shareholders.
To the extent the Fund is exposed directly or indirectly to leverage (through investments in commodities futures contracts) the value of that Fund may be more volatile than if no leverage were present.
In order to qualify for the favorable U.S. federal income tax treatment accorded to a regulated investment company ("RIC"), the Fund must derive at least 90% of its gross income in each taxable year from certain categories of income ("qualifying income") and must satisfy certain asset diversification requirements. Certain of the Fund's investments will not generate income that is qualifying income. The Fund intends to hold such commodity-related investments indirectly, through the Subsidiary. The Fund believes that income from the Subsidiary will be qualifying income because it expects that the Subsidiary will make annual distributions of its earnings and profits. However, there can be no certainty in this regard, as the Fund has not sought or received an opinion of counsel confirming that the Subsidiary's operations and resulting distributions would produce qualifying income for the Fund. If the Fund were to fail to meet the qualifying income test or asset diversification requirements and fail to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions to its shareholders would not be deductible by the Fund in computing its taxable income.
Investors buy and sell shares on a secondary market (i.e., not directly from the Trusts).
Only market makers or "authorized participants" may trade directly with the Trusts, typically in blocks of 50k to 100k shares.
The ETFs are new products with a limited operating history.
Please see the current prospectus (https://www.etfsecurities.com/etfsdocs/USProspectus.aspx) for more information regarding the risk associated with an investment in the Funds.
Steven Dunn is a registered representative of ALPS Distributors, Inc.
ALPS Distributors, Inc. is the distributor for the ETFS Trust. ALPS is not affiliated with ETF Securities.
EFS 000227 1/31/2018
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SOURCE ETF Securities