US-based exchange-traded fund provider First Trust Advisors has launched the First Trust Alternative Absolute Return Strategy ETF (Nasdaq: FAAR), an actively managed ETF that seeks to profit from either long or short positions in select exchange-listed commodity futures contracts. “Absolute return offers the potential to provide long-term total return in a variety of market environments,” said John Gambla, Senior Portfolio Manager for the Alternatives Investment Team at First Trust. “Additionally, the strategy may offer low or no correlation to equities, bonds, real estate and long-only commodities.”

The S&P Goldman Sachs Commodity Index (GSCI) recorded its best performing month for a year and the second best April on record. The index is up 15.5% since 29th February 2016, marking the biggest consecutive two months in almost seven years since May-June 2009 when it gained 20.4%. According to data from S&P Dow Jones Indices, the Dow Jones Commodity Index and S&P GSCI total return indices also saw positive performances with gains of 9.1% and 10.1%, respectively. However, the rally could be short lived, proving hard to sustain as a result of poor fundamentals underpinning the commodities.

Increased regulation around NOx emissions from motor vehicles is expected to support the prices of platinum group metals (especially platinum and palladium) in 2016 by boosting demand for catalytic converters, according to commodity-based exchange-traded product provider ETF Securities. Nitesh Shah, Director – Commodities Strategist at ETF Securities, says that significant legislation being enacted across Europe, the US and emerging markets such as India is predicted to boost sales in catalytic converters, which use platinum and palladium as key components. Furthermore, prices are expected to be supported by constraints on the supply side of the market.

The US Federal Reserve has made a policy mistake by failing to further raise interest rates thus far in 2016, according to ETF Securities. According to the firm’s latest tri-annual outlook report, ETF Securities believes the Fed’s reluctance to move too far from other central bank policies, despite increasingly stronger domestic fundamentals, is feeding further volatility into the market. James Butterfill, Head of Research and Investment Strategy at ETF Securities, noted: “The risk of waiting too long to raise rates is greater uncertainty. Such a situation seems circular, with markets fretting over Fed decisions and the Fed concerning themselves with market volatility – an issue outside the scope of its mandate.”

The Van Eck Merk Gold Trust (NYSE Arca: OUNZ), launched in May 2014, has surpassed $100m in assets under management. The ETF provides investors with a convenient and cost-efficient way to buy and hold gold while also being the only ETF giving investors the option, if they desire, to take physical delivery of the metal. “We increasingly see investors drawn to OUNZ not only for the simple ETF access it provides to gold, but also its unique feature that enables investors to take delivery of their gold,” said Brandon Rakszawski, ETF Product Manager for VanEck.

WisdomTree Europe has stated that investors with long positions in UK or European equities may wish to consider hedging their positions ahead of the referendum on Britain’s membership in the European Union (EU). The European provider of exchange-traded funds references the performance of UK and European equity and government bond markets in the lead up to the Greek referendum on EU membership as a proxy for the likely market performance leading up to the ‘Brexit’ referendum on 23 June 2016. It was found that the FTSE 100 and EURO STOXX 50 fell by approximately 6% in the 30 days leading up to the referendum while safe haven assets such as German Bunds performed relatively well.

US-based exchange-traded fund provider REX Shares has launched two new gold hedged equity funds, giving investors an efficient way to add gold exposure to broad equity holdings. The ETFs provide exposure to US equities and emerging-markets equities, while offering long exposure to the gold price through the use of futures contracts. The REX Gold Hedged S&P 500 ETF (NYSE Arca: GHS) and the REX Gold Hedged FTSE Emerging Markets ETF (NYSE Arca: GHE) are listed on NYSE Arca. Greg King, Founder and CEO of REX Shares, commented: “Our new ETFs allow them (investors) an unprecedented type of access to the movements in the price of gold without asking them to choose between gold or stocks.”

Gold exchange-traded products from provider ETF Securities saw strong net inflows of over $95m during the past week as investors remained bullish on the yellow metal following dovish comments from the US Federal Reserve. Furthermore, after four consecutive weeks of outflows, WTI crude oil ETPs received positive inflows worth $19.9m. Oil ETPs may trade in a volatile range over the coming month as declining US oil production as well as the uncertainty surrounding the cooperation of key OPEC states in advancing the group’s strategy may influence the price of crude contracts.

Exchange traded product provider WisdomTree Europe has suggested investors position themselves defensively by hedging long equity positions, while also looking to UK Gilts, German Bunds and gold, in its asset allocation strategy released ahead of Britain’s referendum with the European Union, due to take place on 23 June 2016. The statement, which covers various asset classes including equities, fixed income, currencies and commodities, predicts that markets will become increasingly volatile before the referendum as speculation of a potential exit from the Union heightens political uncertainty.

According to a report released by ETF Securities, a leading provider of commodity-based exchange-traded products, industrial metals are on the rise, having experienced double digit growth since their most recent troughs over the past few months. Although the movements represent small gains compared to the bear market across commodities over the past five years, ETF Securities believe firmer fundamentals have the potential to push prices higher.