DWS has today listed a new share class of its commodities ETF on the London Stock Exchange: the Xtrackers Bloomberg Commodity Swap UCITS ETF 3C GBP Hedged (ISIN: LU3370249040).
Article created by the editorial staff of ETFWorld.co.uk
Simon Klein, Global Head of Xtrackers Sales at DWS
DWS has today listed a new share class of its commodities ETF on the London Stock Exchange: the Xtrackers Bloomberg Commodity Swap UCITS ETF 3C GBP Hedged (ISIN: LU3370249040). This is a reinvestment class with GBP currency hedging, designed for GBP-denominated investors seeking diversified exposure to commodities whilst reducing the impact of exchange rate fluctuations at share class level.
The new share class joins the Xtrackers Bloomberg Commodity Swap UCITS ETF, a sub-fund of the Luxembourg-based SICAV Xtrackers managed by DWS Investment S.A. and launched in November 2021, which has raised approximately €700 million in its 1C share class denominated in US dollars. The 3C GBP Hedged class, established in mid-June 2026, has an annual TER of 0.12%, in line with the fund’s main class and at low levels for the category of ETFs tracking diversified commodity baskets.
The underlying index
The investment objective is to replicate the performance of the Bloomberg Commodity Index Total Return 3 Month Forward, whilst seeking to minimise currency fluctuations at share class level. The index is designed as a liquid and diversified benchmark for longer-term commodity investments and represents the returns of a diversified basket of commodity futures.
The exposure covers over 20 commodity futures contracts across six sectors: energy, precious metals, industrial metals, grains, soft commodities and livestock. Twenty-five commodities are eligible for inclusion. Each futures contract is weighted according to two parameters: the commodity’s production share, calculated as the average value of production in US dollars and indicative of economic significance, and the liquidity share, based on average trading volumes.
The methodology includes concentration limits applied annually. Each individual commodity must have a minimum weighting of 2% and may not exceed 15% of the index. Individual commodities considered together with their derivatives – for example, WTI and Brent crude oil together with ULS diesel and petrol – are capped at 25%. Groups of related commodities, such as energy, precious metals, livestock or cereals, may not exceed 33% of the index. The composition is reweighted and rebalanced once a year; between rebalancing events, the weightings may fluctuate beyond the specified limits.
The distinctive feature of the version tracked by the fund is the ‘3-Month Forward’ structure: the index includes commodity futures with three-month maturities that are further out than those of the contracts in the standard Bloomberg Commodity Index. The use of longer-dated contracts is a well-established technique for mitigating rollover costs during periods of contango in the futures curve.
To give an idea of the composition, the target weightings announced by Bloomberg for 2026 allocate 29.44% of the BCOM index to the energy sector, 21.15% to cereals, 18.84% to precious metals and 15.76% to industrial metals; gold remains the single most significant component with a target weighting of 14.90%, whilst one of the new features of the annual review is the reintroduction of cocoa into the basket.
Structure and investment policy
The fund is passively managed and uses synthetic replication. To achieve its objective, the sub-fund invests in transferable securities and enters into derivative contracts (swaps) with one or more counterparties, relating to transferable securities and the index, in order to replicate the index’s return. At the same time, the fund enters into derivative contracts designed to reduce the impact of exchange rate fluctuations between the currency of the index constituents and that of the fund’s shares, in this case the British pound.
The use of synthetic replication is the standard approach for UCITS commodity ETFs, as regulations do not permit the direct holding of physical commodity futures in a harmonised fund with exposure to a diversified basket. The fund may also employ techniques and instruments, including derivative contracts, to manage risk, reduce costs and improve performance.
The index is calculated on a total return basis: the return incorporates not only changes in futures prices but also the component arising from reinvestment. Class 3C is an accumulation class, meaning that income is not distributed but reinvested in the fund’s assets.
With this listing, DWS is expanding its Xtrackers range dedicated to commodities on the London market, where the group is already present with other products tracking the same family of Bloomberg indices, and is offering investors holding sterling a share class hedged against currency risk, providing broad commodity exposure at low cost.
| Product Name | Xtrackers Bloomberg Commodity Swap UCITS ETF 3C GBP Hedged |
| ISIN | LU3370249040 |
| SEDOL | BRSCTF4 |
| Currency | GBP |
| Management Fee | 0.12% |
| Benchmark | Bloomberg Commodity Index Total Return 3 Month Forward |
Source: ETFWorld.co.uk
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