Teucrium unveils AI-driven long/short base metals ETF

Apr 5th, 2023 | By | Category: Commodities

Teucrium Trading, a US-based issuer of commodity-focused ETFs, has launched a new fund that seeks to deliver positive returns regardless of market direction through a systematic long/short strategy across base metals futures.

Teucrium unveils AI-driven long/short base metals ETF

The fund goes long and short across various base metals.

The Teucrium AiLA Long-Short Base Metals Strategy ETF (OAIB US) has been listed on NYSE Arca with an expense ratio of 1.49%.

The fund is linked to the AiLA-S022 Index which consists of standardized base metals commodity futures contracts traded on either the Chicago Mercantile Exchange or the London Metals Exchange. Eligible commodities include aluminum, copper, lead, nickel, tin, and zinc.

Asset allocation is powered by proprietary artificial intelligence developed by technology and data analytics firm OPALai. The firm harnesses machine learning to analyze the micro features of each commodity (futures curve structure, prior day closing price, and recent trading range) as well as macroeconomic indicators such as foreign exchange rates, gross domestic product, consumer price index, and unemployment rates.

The index possesses a strong performance track record dating back to 2017 with an annualized return of 15.38% through 2022 and a Sharpe ratio of 1.86.

Teucrium’s ETF line-up has historically focused exclusively on agricultural commodities with OAIB representing the firm’s first offering outside of this market.

The fund is similar, however, to the recently launched Teucrium AiLA Long-Short Agriculture Strategy Fund (OAIA US) which utilizes a similar approach to seek an absolute return by going long and short across agricultural futures.

Sal Gilbertie, CEO of Teucrium, commented: “Teucrium’s team of experienced, dedicated futures traders is constantly striving to develop new investment products as we seek to make alternative markets more accessible. Teucrium’s wealth of experience offering futures-based ETFs, combined with OPALai’s index creation technology, has enabled us to offer a second institutional-grade strategy as an ETF following the successful launch of OAIA in December.”

Jake Hanley, Managing Director and Senior Portfolio Strategist at Teucrium, added: “Investors are increasingly looking to create more resilient portfolios. As such, they are turning to alternative investments and long-short strategies. Base metals are essential to the creation of hardware and technology we use every day. Yet, base metal futures prices are often volatile. Our long-short strategy provides investors with the potential to profit regardless of the market trend.”

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