ETF Database » GSP

When Structure Matters: ETF, ETN, Or Other?

Michael Johnston — Mon, 12 Dec 2011 14:00:19 +0000

As some financial advisors are now well aware, the term “ETF” is often used rather liberally to refer to a variety of different exchange-traded products that generally function in the same manner from the perspective of an investor. More accurately, ETFs can be described as a type of exchange-traded product, or ETP, an umbrella that also covers exchange-traded commodities, exchange-traded notes, and unit investment trusts (UITs). The nuances of these various structures might not make for the most lively discussion, but it is a worthwhile task for anyone who manages money for a living, as the seemingly minor differences between these types of products can often have a meaningful impact on risk taken on and bottom line returns realized [see 25 Things Every Financial Advisor Should Know About ETFs]. Most advisors are aware of the general differences between ETNs, which are debt instruments, and true ETFs, which feature no credit [...]

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Commodity ETF Investing: Five Factors To Consider

Michael Johnston — Mon, 13 Jun 2011 11:00:22 +0000

Commodity ETPs can be extremely powerful tools for tapping into an asset class capable of providing both return enhancement and diversification benefits. With dozens of products available–there are more than 120 U.S.-listed commodity ETFs according to the ETF screener–picking the right fund for your investment objectives and risk tolerances can be challenging. Beyond the type of commodity included, there can be several attributes of commodity ETPs that shape the risk/return profile; below, we look at five factors to consider when trying to narrow down the universe and find the right commodity ETF (or ETN): 1. Structure: ETC vs. ETN Most investors are familiar with the various product structures that are generally lumped together under the ETF umbrella, including exchange-traded notes, HOLDRs, and UITs. While the fine print of various security types may seem like inconsequential details, the nuances can have a meaningful impact on bottom line returns–especially in the commodity [...]

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How Balanced Is Your Commodity ETF?

Michael Johnston — Mon, 16 May 2011 11:00:08 +0000

As natural resource prices have climbed skyward, interest in exchange-traded products that offer exposure to commodities has accelerated as well. While some investors prefer to achieve targeted access through resource-specific funds–such as those focusing on corn (CORN), sugar (SGG), or copper (JJC)–the most popular commodity ETPs are those that include a variety of types of resources. There are currently about a dozen products in the Commodities ETFdb Category, a group that includes ETPs targeting multiple types of commodities. And while these products are similar in that they employ a broad-based technique to delivering commodity exposure, they are far from identical. The commodity asset class can generally be divided up into five separate sub-sectors: energy, agriculture, industrial metals, precious metals, and livestock. Each of these groupings offers unique risk/return profiles; precious metals may have appeal as safe havens, while industrial metals tend to move in unison with global demand for raw [...]

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Definitive Guide To Coffee ETFs: Coffee ETF Investing 101

Michael Johnston — Tue, 08 Dec 2009 21:48:42 +0000

The rise of the ETF industry has made commodity investing readily available to millions of investors whose options for exposure to this “fourth asset class” were previously limited. Most of the money in commodity exchange-traded products is in diversified funds offering exposure to more than a dozen natural resources through a single security (see a detailed breakdown of the sectors included in these products here). Among commodity-specific funds, those focusing on precious metals, agriculture, and oil and gas tend to be the most popular – GLD ($42.6 billion in assets), DBA ($2.4 billion), and UNG ($4.0 billion) are among the largest ETFs across all asset classes. But the scope of commodity exchange-traded products go far beyond these “superstar” tickers. Coffee ETPs have become a popular option among certain investors looking to gain exposure to an often volatile commodity that has the ability to deliver big returns over short periods of [...]

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ETF Plays For A Falling U.S. Dollar

Michael Johnston — Mon, 02 Nov 2009 08:00:44 +0000

As U.S. equity markets have soared in recent months, the dollar has steadily declined against most of its major rivals, recently falling below the key $1.50 level against the euro for the first time since August of last year. This extended fall has investors wondering if the dollar’s decline reflects temporary volatility, or a long-term trend. Despite the negative connotation, a less valuable currency may not be a negative development for the U.S. economy. But it has nevertheless become a concern for many investors who have begun to seek out ways to hedge against a further decline. Not surprisingly, there are a number of ETFs that offer a way to profit from a falling dollar. Today, we take a look at one of these options: exchange-traded commodity products. To get the rest of the series, be sure to sign up for our free ETF newsletter. Root Of The “Problem” Pinpointing [...]

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UBS Launches New Commodity ETN

Eric Dutram — Thu, 29 Oct 2009 16:54:46 +0000

UBS, under its E-TRACS brand, launched a new exchange-traded note (ETN) yesterday that offers exposure to the DJ-UBS Commodity Index Total Return. This benchmark is designed to provide diversified commodity exposure based on the economic significance of each commodity. The index measures the collateralized returns on a basket of 19 commodity futures contracts representing energy, precious metals, industrial metals, grains, soft commodities, and livestock sectors. The largest commodity allocation is to oil and gas, including crude oil (13.8%), natural gas (11.8%), gasoline (3.7%), and heating oil (3.6%). Other significant weightings include gold (7.9%), soybeans (7.6%), and the industrial metals – copper at 7.3% and aluminum at 7.0%. The ETN which trades under the symbol DJCI, has an expense ratio of 0.50%, and will rebalance yearly in order to make sure that no single commodity makes up more than 33% of the fund. DJCI adds to UBS’ diverse offerings in the [...]

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ETF Database » GSP

When Structure Matters: ETF, ETN, Or Other?

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Commodity ETF Investing: Five Factors To Consider

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How Balanced Is Your Commodity ETF?

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Definitive Guide To Coffee ETFs: Coffee ETF Investing 101

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ETF Plays For A Falling U.S. Dollar

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UBS Launches New Commodity ETN

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