Barclays recently released eight new iPath exchange-traded notes (ETNs) on the NYSE Arca exchange. The new ETNs are linked to eight subindexes of the Dow Jones-AIG Commodity Index, covering the agriculture, copper, grains, energy, industrial, livestock, natural gas and nickel markets, and their debut will double the amount of iPath ETNs available. The ETNs each carry an annual investor fee of 0.75% and have a 30-year maturity. They are:
- iPath DJ-AIG Agriculture Total Return Sub-Index (JJA)
- iPath DJ-AIG Grains Total Return Sub-Index (JJG)
- iPath DJ-AIG Livestock Total Return Sub-Index (COW)
- iPath DJ-AIG Industrial Metals Total Return Sub-Index (JJM)
- iPath DJ-AIG Copper Total Return Sub-Index (JJC)
- iPath DJ-AIG Nickel Total Return Sub-Index (JJN)
- iPath DJ-AIG Energy Total Return Sub-Index (JJE)
- iPath DJ-AIG Natural Gas Total Return Sub-Index (GAZ)
The bulk, $2.3 billion, of the existing iPaths’ approximately $3.6 billion in total assets is located in the iPath Dow Jones-AIG Commodity Index Total Return ETN (DJP), so Barclays’ decision to offer investors more granularity in their investment choices in that area makes sense, says Heather Bell for Index Universe. It already offers ETNs covering the S&P/Goldman Sachs Commodity Index iPath S&P GSCI Total Return Index ETN (GSP), and its crude oil subindex, iPath S&P GSCI Crude Oil Total Return ETN (OIL).
The new iPath ETNs aren’t the only subindex commodity ETNs on the market today. The ELEMENTS ETN platform offers four products. The ELEMENTS Rogers International Commodity Total Return Index ETN (RJI) tracks a broad commodity index, but the other three ETNs track subindexes of that index: ELEMENTS Rogers International Agriculture Total Return Index ETN (RJA), ELEMENTS Rogers International Energy Total Return Index ETN (RJN) and ELEMENTS Rogers International Metals Total Return Index ETN (RJZ). They represent the only competitors to the iPath commodities ETNs and also have expense ratios of 0.75%.
The ELEMENTS ETNs suffer from a lack of investor recognition. Barclays Bank’s iPaths can piggyback on the success and established brand name of the Barclays Global Investors iShares exchange-traded funds. However, the ELEMENTS platform is starting from scratch in a fairly new and unknown product area and does not have that cross-marketing advantage. The Rogers indexes are among the most thorough commodity indexes available, which could appeal to investors looking for diversified exposure.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.