For each of these ETFs, Jefferies acts as a brand licensor for the enterprise, and ALPS Advisors acts as the ETF adviser. According to SEC filings, ALPSin pipeline are several more funds:
- Jefferies | TR/J CRB Wildcatters Exploration & Production Equity ETF, which will focus on small-cap companies that derive most of their revenues from the exploration and production of energy products, including natural gas
- Jefferies | TR/J CRB Global Precious Metals Equity Index Fund
- Jefferies | TR/J CRB Global Energy Equity Index Fund
- Jefferies | TR/J CRB Natural Gas Equity ETF
Currently, CRBQ is the provider’s broadest fund, which tracks an index composed of companies involved in the production and distribution of commodities and commodity-related products and services in the agriculture, base/industrial metals, energy and precious metals sectors. The annual expense ratio is 0.65%.
Three particular benefits of investing in commodity equity ETFs are:
- Investors benefit from the knowledge that a commodity producer brings to the table; no expertise on the investor’s part is required
- Commodity ETFs that hold futures or physical commodities can trigger K-1s at tax time
- Commodity equity ETFs won’t be subject to any Commodity Futures Trading Commission (CFTC) position limits that are handed down (More on the CFTC’s actions)
Commodity investing in general has been gathering interest on the back of a weakening dollar, fears of inflation and potential supply constraints down the line as the world’s population continues to expand. (How to hedge against a weakening dollar).
In the future, Jefferies wants to expand beyond commodities. “We are seeking to expand our line-up,” Chada says. “We’re committed to providing institutional-quality investment products and themes for individual investors.”
Jefferies expanded into ETFs because, in Chada’s words, “ETFs offer important benefits, including transparency, liquidity and low-costs, and have quickly become the platform of choice for many institutional and individual investors alike” The ETF industry has ballooned to a record $751 billion in assets as of Nov. 30, so it’s no surprise that more and more established financial industry players want to get in on the action.
For more stories about commodity ETF investing, visit our commodity ETF category.