Jefferies ETFs: New Options For Commodity Exposure

by on November 6, 2009 | ETFs Mentioned:

Last week, Jefferies Asset Management unveiled two new exchange-traded funds targeting equities of global commodity producers. The two funds, which track subsets of the Thomson Reuters/ Jefferies CRB In-The-Ground Global Commodity Index tracked by CRBQ, invest in companies across the globe that are involved in the extraction and production of commodities. CRBI seeks to track the Thomson Reuters/Jefferies CRB In-The-Ground Global Industrial Metals Equity Index, which focuses on companies that produce industrial metals such as aluminum and steel. Meanwhile CRBA tracks Thomson Reuters/Jefferies CRB In-The-Ground Global Agriculture Equity Index which follows companies that produce seeds, fertilizers and companies that assist in agricultural production.

wheatBoth funds have ALPS as their investment adviser, hold about 35 individual equities, and have an expense ratio of 0.65%. CRBA is much more weighted towards North American firms, with all three of the top holdings coming from either the United States or Canada, including Archer Daniels Midland, Deere, and Potash Corp of Saskatchewan.

Meanwhile, CRBI has an international slant, focusing on miners with global operations such as Anglo American, BHP Billiton and Rio Tinto, all of which are listed on the London Stock Exchange. The two new ETFs, along with CRBQ, allows investors an alterntative to investing in pure commodity ETFs, and allow investors to break down their investments into specific commodity sectors, much like some of the ETFs that already exist in the commodity sector. With the launch, only two subsets of the global commodity index still do not have funds: energy and precious metals subsets.

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Disclosure: No positions at time of writing.