Lyxor Exchange Traded Funds has launched a new range of ‘Smart’ Commodity ETFs on the London Stock Exchange. The new Optimix TR and Momentum TR indices use rule-based, enhanced beta strategies which aim to optimise roll yields across contracts and seasons, or to generate absolute returns from a universe of 24 commodities.
Professional investors can gain intelligent access to a diverse basket of commodities, which look to take advantage of the shape of the forward curve and momentum trends.
For investors looking for more straight forward Long, or Short exposure, Lyxor has added two S&P GSCI linked funds. The Lyxor ETF S&P GSCI Aggregate 3 Month Forward, and Lyxor ETF S&P GSCI Aggregate Inverse 1 Month Forward provide either Long or Short exposure to a broad aggregate basket of 24 commodity futures. By accessing such a variety of commodities in one fund, investors can take a view on the whole commodity sector in just one simple trade.
These new Lyxor ETFs are UCITS compliant, adhering to both the diversification rules and credit risk limits under UCITS IV. However, Lyxor goes beyond UCITS’ rules and manages the fund’s exposure to the swap issuer every day, targeting 0% counterparty risk for all its ETFs. Lyxor also enforces its own strict guidelines with regards to asset quality, which means that only highly-capitalised, liquid stocks will be used as assets held by the funds. Plus, in order to eradicate any hidden counterparty risk, Lyxor ETFs do not engage in any securities lending.
The new Lyxor broad-based commodity ETFs replicate the performance of their benchmark index through a Total Return Swap, and a basket of international large cap stocks which are held as assets by the fund in a segregated account. To ensure absolute transparency for investors, full disclosure of the swap counterparty, counterparty risk and physical assets can be found each day on www.lyxoretf.co.uk.
