On Thursday, State Street Global Advisors unveiled its SPDR Bloomberg Enhanced Roll Yield Commodity Strategy No K-1 ETF (CERY ).
“As investors increasingly turn to ETFs to optimize their portfolios, we’re excited to be expanding our SPDR ETF offering to help them create better outcomes,” noted Anna Paglia, chief business officer at State Street Global Advisors.
CERY seeks to provide investors with similar results to that of the Bloomberg Enhanced Roll Yield Total Return Index. The fund has a net expense ratio of 0.28%.
Diversified Commodity Index
The Bloomberg Enhanced Roll Yield Total Return Index is a liquid and diversified benchmark for the broad commodity market. To ensure proper commodities diversity, the index caps weights for both single commodities as well as commodity groups.
A wide range of commodities remain eligible for inclusion within this index. These include commodities from the agricultural, livestock, industrial metals, precious metals, and energy sectors.
At the start of every year, the index will rebalance target weights for each commodity. Per the prospectus, commodity target weights are curated by combining slope scores and commodity liquidity percentages. As of July 31, 2024, the index holds notable exposure to precious metals, agricultural, and energy commodities.
CERY intends to invest most, if not all, of its assets in either securities or instruments that provide exposure to the index. This includes components of the index, along with other instruments that can provide exposure to the index’s components.
To achieve its investment objectives, CERY primarily invests in commodity-linked derivative instruments. Through the use of total return swaps, futures contracts, and other options, the fund aims to provide similar results to that of the index.
State Street Global Advisors has extensive experience in navigating commodity-based ETF strategies. One of State Street’s largest commodity ETFs, the SPDR Gold Shares (GLD ), has over $69 billion in AUM. On the energy side, the Energy Select Sector SPDR Fund (XLE ) possesses over $36 billion in assets under management.
“As the leading provider of gold ETFs, it’s great to see State Street Global Advisors expand its lineup,” said Todd Rosenbluth, head of research at VettaFi. “Many advisors have a dedicated allocation to commodities using ETFs.”
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