Elkhorn Rolls Out DWA-, RAFI-Backed Active Commodity ETFs

Elkhorn has partnered with Dorsey Wright & Associates and Research Affiliates Fundamental Indexes to launch two new actively managed commodity-related exchange traded funds.

On Tuesday, Elkhorn rolled out the Elkhorn Commodity Rotation Strategy ETF (NasdaqGM: DWAC) and Elkhorn Fundamental Commodity Strategy ETF (BATS: RCOM). DWAC has a 0.99% expense ratio and RCOM comes with a 0.75% expense ratio.

The two actively managed commodity ETFs have different takes on the commodities markets. DWAC, which is based off Dorsey Wright & Associates momentum-based investing style, takes the top five commodities within the S&P GSCI Index based on relative strength metrics.

“I have long been a believer in tactical opportunities within the commodity market,” Tom Dorsey, Founder of Dorsey Wright & Associates, a Nasdaq Company, said in a press release. “We have built commodity-based models for decades, yet this is the first ETF based on our commodity research. For investors unsure of how to invest in commodities, DWAC’s strategy gives investors dynamic exposure to the commodity marketplace.”

The DWA relative strength model evaluates a universe of 21 commodities and provides equal-weighted exposure to the five commodities that exhibit the highest relative strength – a momentum investing technique that compares the performance of a security to the overall market. A relative strength or momentum strategy basically bets on high flying securities that will fly to new heights.