Bringing you live news and features since 2006 

Van Eck launches CM Commodity Index Fund


New York-based asset manager Van Eck Global has launched a new index-based, open-end mutual fund, the Van Eck CM Commodity Index Fund.

The Fund, a “second-generation” commodity product, is designed to reduce the potential negative effects of contango that can significantly reduce the performance of commodity investments over time.

The passively managed Van Eck CM Commodity Index Fund seeks to track, before fees and expenses, the performance of UBS Bloomberg Constant Maturity Commodity Total Return Index (CMCI). The Index was designed to minimize investment exposure to the front end of the futures curve and diversifies exposure across maturities. By diversifying exposure across multiple maturities, the Index seeks to mitigate the impact of contango.

“Many traditional indices, and thus the funds that track them, suffer from negative roll yield during periods of contango," says Kristen Capuano, Marketing Director at Van Eck. "Van Eck has sought to minimize this problem in the construction of our new fund by using a benchmark that places less emphasis on the front end of the futures curve."

Contango occurs when the price of a futures contract exceeds the expected spot price at contract expiration. In contango, when futures prices are falling, the seller benefits. Conversely, backwardation occurs when the price of a futures contract is below the expected spot price at contract expiration. In this scenario, when futures prices are rising, the buyer benefits. Roll yield is the amount of return generated during periods of backwardation, while negative roll yield refers to the amount of return lost during periods of contango.

The CMCI is diversified across 26 commodities and five maturities, and is rebalanced monthly to reduce the risk of over-concentration in any one commodity. Unlike traditional indices, the CMCI is diversified along the entire curve and uses a continuous roll.

“We are pleased to be adding this innovative product to our family of fund offerings, and are excited to be teaming up with UBS, one of the most respected names in commodity indexing,” says Jan van Eck, Principal of Van Eck Global. “This Fund is a logical extension of our already robust commodity offerings, and helps satisfy an important need of investors and financial professionals.”

This new offering will complement Van Eck’s existing family of actively managed commodity mutual funds, including the Van Eck Global Hard Assets Fund (GHAAX) and the Van Eck International Investors Gold Fund (INIVX), as well as Van Eck’s Market Vectors hard assets exchange-traded funds (ETFs), which includes ETFs focused on agribusiness (MOO), alternative energy (GEX), coal (KOL), gold mining (GDX and GDXJ), hard assets producers (HAP), nuclear energy (NLR) and steel (SLX). Van Eck is the sixth largest provider of ETFs in the United States in terms of assets under management as of November 30, 2010.

Latest News

European ETFs raised USD47.8 billion in Q1, a 15 per cent increase compared to the same period in 2023, according..
LSEG Lipper’s March report finds that globally equity ETFs (+EUR113.2 billion) enjoyed the highest estimated net inflows for the month,..
Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by