New iShares ETF Takes Active Management to Commodities

Agriculture equities and futures combine for another 15% of the new ETF’s weight. A combined 6% of COMT’s weight goes to precious metals producers and futures.

COMT has a simplified tax treatment compared to most commodity funds. Most commodity funds are structured as publicly-traded partnerships, and have a pass-through taxation structure. This effectively shifts the income tax liability from the fund earning the income to the shareholders who hold the fund. Unlike such commodity funds, COMT will report taxable gains and distributions on a Form 1099, the standard tax reporting form for mutual funds and ETFs,” added iShares.

Active management offers advantages with commodities. For example, the actively managed First Trust Global Tactical Commodity Strategy Fund (NasdaqGM: FTGC), with which COMT will compete, is down just 2% this year compared to a 3.6% loss for the GreenHaven Continuous Commodity Index Fund (NYSEArca: GCC). [A Shining Star Among Commodities ETFs]

iShares, a unit of BlackRock (NYSE: BLK), the world’s largest asset manager, also introduced the iShares MSCI Emerging Markets Horizon ETF (NYSEArca: EMHZ) today. COMT charges 0.48% per year, a favorable fee relative to many actively managed ETFs.

ETF Trends editorial team contributed to this post.