Hartford Funds lists its first commodity-focused ETF

Sep 20th, 2021 | By | Category: Commodities

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Hartford Funds has introduced a new actively managed ETF with the launch of the Hartford Schroders Commodity Strategy ETF (HCOM US).

Hartford Funds launches first commodity ETF

Vernon Meyer, Chief Investment Officer at Hartford Funds.

Listed on NYSE Arca, HCOM is Hartford’s first commodity-focused ETF, offering exposure to commodity futures and equities of commodity-related companies.

Vernon Meyer, Chief Investment Officer at Hartford Funds, said: “The Hartford Schroders Commodity Strategy ETF allows us to offer exposure to an alternative asset class that we feel is ripe for opportunity in the current market environment.

“This product further demonstrates our commitment to providing diverse, long-term investment opportunities that can help our clients achieve their investment goals.”

The ETF is sub-advised by the North American division of London-headquartered asset manager Schroders. Schroders’ portfolio managers James Luke, Malcolm Melville, and Dravasp Jhabvala, who average 17 years of investment experience between them, head up the fund’s day-to-day operations.

According to the ETF’s prospectus, the fund, which is benchmarked against the Bloomberg Commodity Total Return Index, will invest in futures and swaps on individual commodities or commodity indices, which it will implement through a wholly-owned Cayman Islands subsidiary, a structure that allows the ETF to access commodity markets freely without breaching federal income tax laws.

Up to 25% of the ETF may be invested in this Cayman Islands subsidiary with the remaining assets allocated to commodity-related equities, commodity ETFs, money market instruments, and short-term investment-grade fixed income securities.

Schroders will consider fundamental, quantitative, technical, and ESG factors when allocating to commodities and commodity-related equities.

The ETF comes with a net expense ratio of 0.89% due to a fee waiver that will remain in place as long as the fund is invested in the Cayman Islands subsidiary. Its gross expense ratio is 1.12%.

Hartford Funds has significantly broadened its ETF offering this year. In March, the firm introduced its first thematic equity ETF, the Hartford Longevity Economy ETF (HLGE US), which applies a multifactor approach to companies poised to benefit from an ageing population.

And more recently, in August, it launched its first socially responsible ETF, the Hartford Schroders ESG US Equity ETF (HEET US), which invests in a multi-factor portfolio of US equities that meet Schroders’ internally developed ESG criteria.

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