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ETF Securities gets third commodity ETF onto Schwab list


ETF Securities has announced that its ETFS Bloomberg All Commodity Strategy K-1 Free ETF (BCI) has been added to the Schwab ETF Select List.

BCI is ETF Securities’ third fund to be added to the list, and the firm says this demonstrates rising demand for low cost diversified commodity ETFs in the US.

Schwab’s ETF Select List, updated quarterly, includes just one ETF per asset type. Selection is based on a combination of qualitative and quantitative variables such as cost of ownership, risk and fund structure. Other ETF Securities’ funds on the list are the ETFS Physical Precious Metals Basket Shares (GLTR) and ETFS Physical Swiss Gold (SGOL).

BCI is an actively managed ETF that seeks to provide a total return designed to exceed the performance of the world’s leading commodity index, Bloomberg Commodity Index (BCOM). It is available in a K-1 free, ’40 Act structure, offering 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. At a total expense ratio of 0.29 per cent, BCI is 62 per cent less expensive than the average broad commodity ETF in the United States, ETF Securities writes.

BCOM consists of 22 commodities which are weighted 2/3 by trading volume and 1/3 world production with an additional criteria of global economic significance. Weight caps are also applied to limit concentration in a particular sector (33 per cent).

“We are one of the first asset managers to provide U.S. investors with efficient, diversified exposure to BCOM in an ETF format, and we are delighted that Schwab users will have easy and direct access to the product,” says Steven Dunn, Executive Director and Head of US Distribution for ETF Securities. “Over time, commodities have an important role to play in portfolios, offering diversification, and also delivering a hedge against inflation.”

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