It’s not a physically-backed product, but the industry’s first aluminum exchange traded fund (ETF) should still hold a lot of appeal to investors who want exposure to the metal’s producers.
Global X Aluminum (NYSEArca: ALUM) tracks a basket of aluminum producers and miners, the first such ETF to do so. Previous products have come in exchange traded note (ETN) form, in the case of iPath Dow Jones-UBS Aluminum (NYSEArca: JJU), or tracked a basket of futures, such as PowerShares DB Base Metals (NYSEArca: DBB), which gives exposure to zinc and copper, as well.
Global X feels that aluminum is another way for investors to play the global infrastructure boom. Aluminum has a wide range of uses, from packaging (cans, foil, bottle caps) to transportation (in planes and cars) – and that’s only scratching the surface of how it’s used. Aluminum is so popular across a range of industries because it’s lightweight and resistant to corrosion.
ALUM will charge a 0.69% expense ratio. The United States has the largest allocation in the fund with 21.5% of the weight. Hong Kong is 19.5%, while Japan and Great Britain get a 15% weight. The fund may get off to a rocky start today: Alcoa (NYSE: AA), which is 10% of the fund, got a downgrade from buy to hold, sending its shares down.
The ETF industry is still eagerly awaiting the launch of a physically-backed aluminum ETF, but Global X’s offering should sate the appetite…for now.
WisdomTree today launched the WisdomTree Managed Futures Strategy (NYSEArca: WDTI). It’s an actively managed fund that seeks to provide returns in line with the Diversified Trends Indicator. The fund is the ETF industry’s first managed futures strategy fund.
WDTI aims to deliver diversification through owning uncorrelated assets as well as a long/short strategy, the potential for profits in bull and bear markets, the potential to perform in either deflationary or inflationary environments and exposure to commodities in high demand around the world. It will carry a 0.95% expense ratio.
Meanwhile, Van Eck has renamed one of its nuclear ETFs to Market Vectors Uranium+Nuclear Energy (NYSEArca: NLR). The ticker will remain unchanged.
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