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Investors gain access to broad commodities in K-1 free ETF suite


ETF Securities, a provider of exchange traded funds (ETFs) tracking the Bloomberg Commodity Indices, 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 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 form 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 modernised product," says Steven Dunn, executive director and head of US 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 democratising 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 currently tracked by approximately USD62 billion 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 per cent, 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," says Alan Campbell, global product manager, Bloomberg Indices. "We're pleased to extend our relationship with ETF Securities in the US 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.

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