WisdomTree has completed the reorganisation of the WisdomTree Continuous Commodity Index Fund (CCIF) into and with the WisdomTree Enhanced Commodity Strategy Fund.
The Enhanced Commodity Strategy Fund is organised under the Investment Company Act of 1940, as amended, with no Schedule K-1 and an expense ratio of 0.55 per cent. The Enhanced Commodity Strategy Fund will focus on providing broad-based exposure to a diversified basket of commodities through investment in futures contracts and trade under the ticker symbol GCC.
Jeremy Schwartz, WisdomTree Global Head of Research, says: “The macroeconomic backdrop as we emerge from lockdowns could bring higher inflation. We believe it is a good time to investigate commodities as hedges to traditional portfolios given the sustained low interest rate environment and these elevated inflation risks.”
Taking a broad-based commodity investing approach, the Enhanced Commodity Strategy Fund seeks to:
Provide broad-based exposure to a diversified basket of over 25 commodities across four major sectors: Energy, Agriculture (including Grains, Softs and Livestock), Precious Metals, and Industrial Metals, in contrast to CCIF, which provided exposure to a more limited basket of 17 commodities; and
Focus on hard assets and precious metals to preserve purchasing power and industrial metals like copper, aluminium, and nickel for anticipated demand growth with the energy transition and decarbonisation processes.
“The Enhanced Commodity Strategy Fund provides commodity exposure across all major sectors while recognizing through its exposures the shifting commodity demand from new technologies in electronic devices, electricity delivery and storage, transportation, communication, and manufacturing. In contrast to CCIF, the Enhanced Commodity Strategy Fund does not use a fixed rolling mechanism as it seeks to maximise carry and roll futures contracts in a manner designed to enhance returns while lowering volatility,” says Schwartz.