Chris Gannatti of WisdomTree
WisdomTree has launched two enhanced exchange-traded commodities (ETCs), offering investors exposure to industrial metals and energy.
The Boost Enhanced Industrial Metals ETC (META) and the Boost Enhanced Energy ETC (BENE) are listed on the London Stock Exchange, each with a total expense ratio (TERs) of 0.40%.
The ETFs will adopt an optimised roll mechanism that aims to minimise potential losses arising from commodity future contracts in contango or to maximise the benefit from contracts in backwardation.
A roll is when a futures contract is switched from the front month contract that is close to expiration to another contract in a further-out month.
META tracks the Optimised Roll Industrial Metals Total Return index and BENE tracks the Optimised Roll Energy Total Return index, which both incorporate a smart roll mechanism, based on the S&P GSCI Dynamic Roll indices.
Christopher Gannatti, head of research in Europe at WisdomTree, who joined from the US office last April, commented: “The roll in these ETCs substantially mitigates the costs of holding commodity futures contracts and this can potentially reduce the volatility of returns.
“This removes one of the main barriers to having a long-term allocation to commodities.”
Rafi Aviav, head of product development at WisdomTree, added: “We are committed to providing comprehensive solutions for investors and these new products add even more breadth to our commodity offering.”