Source has launched the Source Bloomberg Commodity ex-Agriculture UCITS ETF which gives investors diversified commodity exposure, while excluding agriculture and livestock.
It follows on from the success of the Source Bloomberg Commodity UCITS ETF, which has already raised EUR1.2 billion of assets since January and was the most successful European ETF launch in the past five years.
Chris Mellor, product specialist at Source, explained, “Commodities is a pretty broad asset class. Some investors want exposure to just one commodity, others want exposure to all of them, and others want to diversify but exclude some sectors.”
The new Source ETF aims to deliver the performance of the Bloomberg ex-Agriculture and Livestock 20/30 Capped Index, after fees. With a total cost of only 0.40 per cent per annum (an ongoing charge of 0.19 per cent and swap fee of 0.21 per cent), the fund is significantly cheaper than competing ETFs.
Mellor says: “Many investors in Europe told us they wanted a simple, competitively priced commodity ETF that excluded the agriculture components. Prior to this launch, the cheapest one in Europe charged around 19 basis points more than our fund.”