By Fiona Boal, Head of Commodities and Real Assets at S&P Dow Jones Indices.
The S&P GSCI, a widely recognized measure of broad commodities market beta, fell 8.4% in February. The global spread of coronavirus represents a simultaneous demand and supply shock, a situation that is close to unprecedented in global commodities markets.
The Royal Mint has become the first government-owned mint in Europe to issue an exchange-traded product with the launch of the Royal Mint Physical Gold Securities ETC on the London Stock Exchange. The ETC provides exposure to allocated physical gold bars sourced in line with LBMA’s Responsible Sourcing Programme and stored in the Royal Mint’s vault in Wales. It is available to trade in USD (RMAU LN) and GBP (RMAP LN), and comes with a total expense ratio of 0.22%.
Direxion has unveiled three new ETFs on NYSE Arca targeting strategic long-term investment themes. Two of the funds – the Direxion MSCI USA ESG – Leaders vs. Laggards ETF (ESNG US) and the Direxion S&P 500 High Minus Low Quality ETF (QMJ US) – utilize a long/short approach to establish more pronounced exposure to ESG and quality factor risk premia within the US equity market, while the third – the Direxion Flight to Safety Strategy ETF (FLYT US) – invests in a portfolio of safe-haven assets. Dave Mazza, Managing Director and Head of Product at Direxion, commented, “These strategies allow a broader audience to benefit from our expertise in delivering smart, precise exposure to distinct and strategically focused investment opportunities.”
By Jim Wiederhold, Associate Director, Commodities and Real Assets, S&P Dow Jones Indices.
It was a tough start to the year for commodities. The S&P GSCI ended the first month of 2020 down 10.8%, the largest month-over-month decline since November 2018.
Invesco has reduced the expense ratio on its $7.6 billion physical gold ETC, from 0.24% per annum to 0.19%. Following the reduction, the Invesco Physical Gold ETC offers the joint-lowest fixed annual fee of any physical gold exchange-traded product available in Europe. According to Invesco, it is the lowest cost when looking at total cost of exposure. Chris Mellor, Head of EMEA ETF Commodity Product Management at Invesco, commented, “For a decade now, our physical gold ETC has offered investors an easy and efficient way to gain exposure to gold, and now for an even lower cost.”
Nationwide Financial has launched an actively managed US equity ETF that seeks to provide enhanced income and downside protection through the use of options.
By Nitesh Shah, Director, Research at WisdomTree.
We ended 2019 with one crisis averted: US-China tariffs that were supposed to be ramped up on 15 December were canceled as the two nations reached a “phase one” trade deal. But as 2019 came to a close and 2020 started, a crisis which had been brewing for some time in the background came to the foreground: tensions between US and Iran flared to levels not seen since 1979.
By Fiona Boal, Head of Commodities and Real Assets, S&P Dow Jones Indices.
The S&P GSCI ended 2019 up 17.6%. This was the S&P GSCI’s 10th-strongest performance since 1990 and its best annual return since the heights of the so-called commodity supercycle in 2007.
By the ETF research team at Direxion Investments.
Negative-yielding debt has declined from its all-time peak, but it still represents close to 24% of all global bonds. Until recently, the idea of negative-yielding debt was unfeasible to many and now it is nearly a quarter of all debt issued around the world. Even $900 billion of corporate bonds trade at negative yields highlighting the pervasiveness of this phenomenon.
By Fiona Boal, Head of Commodities and Real Assets, S&P Dow Jones Indices.
In this blog post, we present five eclectic thoughts for commodity investors to ponder as we look forward to the New Year and the start of a new decade.