LGIM expands ETF range with launch of a new share class

LGIM expands ETF range with launch of a new Multi-Strategy Enhanced Commodities UCITS ETF on the London Stock Exchange

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Steven de Vries, Head of Wholesale Distribution, UK Europe and Latin America at LGIM

L&G Multi-Strategy Enhanced Commodities UCITS ETF

The L&G Multi Strategy Enhanced Commodities UCITS ETF aims to track the performance of the Barclays Backwardation Tilt Multi-Strategy Capped Total Return Index.

Fund snapshot

    Broad commodities exposure

Basket of commodity futures with dynamically determined expiry dates

    Diversification

Commodities are a distinct asset class with returns that are largely independent of stock and bond returns

    Inflation hedge

Commodity indices tend to benefit from rising inflation

Barclays Backwardation Tilt Multi-Strategy Capped Total Return Index

The Index provides broad-based exposure to commodities via a diversified basket of commodity futures with different expiry dates of up to 1 year, selecting specific contracts based on shape of the futures curve or other idiosyncratic properties.

The Index provides a return equivalent to a fully “collateralised” investment in a diversified portfolio of commodity “futures contracts” across the following sectors: (1) Energy; (2) Industrial metals; (3) Precious metals; (4) Agriculture; and (5) Livestock.

The Index return is comprised of: (1) the “spot” return which reflects the day-to-day changes in the prices of the commodity futures contracts; (2) the “roll” return associated with periodically selling the futures contracts that are nearing their expiry dates with later dated equivalents in order to maintain exposure to the commodity futures on an ongoing basis); and (3) the “collateral” return which reflects the interest that a commodity investor would earn where they deposit with a bank (for safe keeping) the cash that they will need to settle the contract at the future delivery date.

Source: ETFWorld.co.uk