Source Launches New Commodities ETF

Robbie Lawther

7 June 2017

Independent ETF provider has launched the Source Bloomberg Commodity ex-Agriculture UCITS ETF. This is the latest addition to Source’s range of core portfolio funds, which aim to provide efficient, low cost exposure to popular benchmarks.

The new ETF will give diversified commodity exposure, while excluding agriculture and livestock. It will be available in Europe on Xetra trading system, Source said in a statement yesterday.

This ETF will follow on from the Source Bloomberg Commodity UCITS ETF, which has already raised €1.2 billion ($1.35 billion) of assets since January 2017. According to Source, the ETF is 33 per cent cheaper than the lowest cost competing fund.

“Commodities is a pretty broad asset class,” said Chris Mellor, product specialist. “Some investors want exposure to just one commodity, others want exposure to all of them, and others want to diversify but exclude some sectors. Many investors in Europe told us they wanted a simple, competitively priced commodity ETF that excluded the agriculture components. Prior to this launch, the cheapest one in Europe charged around 19 basis points more than our fund.”

According to Source, European investors have been increasing their interest into commodities this year, due to the political uncertainty and high equity valuations, which have made investors, want to diversify their portfolios.