A new exchange-traded fund, iShares Commodities Select Strategy ETF (COMT), has begun trading on The Nasdaq Stock Market.
"We believe commodities play an important role in investor's portfolios, but investing in them can be a challenge," says Patrick Dunne, head of iShares global markets and investments at BlackRock. "The iShares Commodities Select Strategy ETF provides investors with comprehensive commodity exposure in a simple, efficient way through futures and equities and removes a tax barrier that may have kept investors away from commodities."
COMT is structured to provide cost-effective, simple access to a diversified mix of commodities through futures and commodity-related companies. The fund is intended to be an all-in-one commodity solution by providing comprehensive commodity exposure in a smarter, more efficient way through both futures and equities; removing a tax barrier that may have kept investors away from commodities and utilising a roll methodology that seeks to improve returns. The fund manager uses a roll methodology designed to minimise the negative return impact of 'contango', which describes a term structure of the futures curve where the future price is above the expected future spot price. Additionally, the ETF structure of COMT alleviates the need for investors to file a K-1 at tax time.
"We are thrilled to embark on a closer partnership with BlackRock and welcome their unique exchange-traded product to the Nasdaq family of listed companies and ETPs," says Walt Smith, Vice President, head of US equities at Nasdaq. "As an operator of leading electronic trading venues in multiple asset classes including cash equities and fixed income, we continue to facilitate various investment opportunities in these products."