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Direxion today launched the Direxion Breakfast Commodities Strategy ETF (BRKY), a first-of-its-kind ETF offering exposure to the commodities that are commonly included in breakfast.
BRKY tracks the S&P GSCI Dynamic Roll Breakfast (OJ 5% Capped) Index, which includes a basket of six commodities, including corn, coffee, lean hogs (bacon), orange juice concentrate, sugar, and wheat, according to a statement from the firm. The fund listed on the NYSE on June 1.
The new fund provides access to commodities whose prices are increasing due to supply chain pressures, geopolitical tensions, and weather-related issues. In a period of persistent inflation, this basket of commodities may offer strong diversification characteristics, due to their non-correlated returns in comparison to stocks and bonds, according to a statement from the firm.
Direxion is best known for its popular leveraged and inverse and thematic ETFs. The firm has $28.6 billion in assets under management, as of the end of March.
“2022 has been one of the most challenging environments for traditional portfolios in decades,” Direxion managing director and head of product David Mazza said in a statement. “Investors can no longer rely on only stocks and bonds to meet their financial goals. Breakfast commodities can play an important role in providing diversification, as well as a hedge against the inflation we are all feeling in our wallets.”
The global food supply chain is more interconnected than ever and experiencing pricing pressures due to the conflict in Ukraine, droughts in countries such as Brazil, and more countries (including India) restricting food exports, according to a statement from the firm.
Food prices hit their highest levels ever in April 2022, according to the Food and Agriculture Organization of the United Nations (FAO). Year-over-year, they increased by 30%, highlighting the extreme nature of these challenges.
“Everyone is feeling the impact of inflation,” Mazza said in a statement. “Even the price of a cup of coffee, or a bowl of cereal, has skyrocketed. But there is an opportunity to take advantage of these rising prices in your portfolio by investing in these commodity staples with BRKY.”
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