LGIM Commodity Composite Source ETF surpasses $150m in assets

Sep 3rd, 2012 | By | Category: Commodities

The LGIM Commodity Composite Source ETF (LGCU), a broad-based commodity exchange-traded fund, has accumulated more than $150 million in assets since its launch in January this year, according to a statement from the fund’s sponsors, Legal & General Investment Management (LGIM) and Source.

LGIM Commodity Composite Source ETF (LGCU) surpasses $150m in assets

The LGIM Commodity Composite Source ETF (LGCU), which debuted in January this year, has surpassed $150m in assets.

The statement also notes that during this time the majority of ETF providers have, according to Bloomberg data, seen outflows in broad commodity ETFs in Europe.

The fund tracks the LGIM Commodity Composite Index (Bloomberg code: TGPLGCC), an index designed to represent the collective performance of a wide range of commodities by providing an investible benchmark consisting of selected indices from leading global index providers.

LGIM uses an in-depth quantitative and qualitative screening process to select what it believes are ‘best-of-breed’ commodity indices that, when combined, deliver high-quality, dynamic and cost-efficient exposure to the broad commodities market.

The index is re-balanced quarterly and currently provides exposure to 31 different commodities across precious and industrial metals, agriculture, softs and energy. As of 31 July, 2012, the top five weights were crude oil, copper, corn, aluminum and wheat.

Commenting on the milestone, Stefan Garcia, Head of commodity sales at Source, said: “The success of this product supports both the value of optimised indices, counterparty risk diversification and the role of LGIM as index manager.”

Simon Midgen, Head of Index Strategy at LGIM, added: “The LGIM Commodity Composite Index is designed to provide investors with a transparent measure of the performance of broad-based commodities. The rapid growth in assets linked to the index provides further evidence that investors have embraced this approach.”

The LGIM Commodity Composite Source ETF, which has a management fee of 0.40% and a swap fee of 0.45%, is listed on the London Stock Exchange and trades in USD and GBP.  It is fully UCITS compliant and registered for sale in Austria, Finland, France, Germany, Ireland, Italy (for institutional investors only), Luxembourg, the Netherlands, Sweden and the United Kingdom.

The indices included in the current composition of the LGIM Commodity Composite Index are the Barclays Capital Commodity Index Pure Beta TR, the Citi CUBES Index Total Return, the JPMCCI Ex‐Front Month Energy Light Index (TR) and the UBS Bloomberg Constant Maturity Commodity Index.

The LGIM Commodity Composite Source ETF is just one of a number of broad-based commodity ETFs listed on the London Stock Exchange, tracking a range of different benchmarks. Examples include roll-optimised funds such as the Lyxor ETF Broad Commodities Optimix TR (OPTG) and the iShares S&P GSCI Dynamic Roll Commodity Swap ETF (SDYC), and first-generation funds such as the RBS Market Access Rogers International Commodity Index ETF (RICI) and the ETFX DJ-UBS All Commodities 3 Month Forward ETF (COMF).

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