Currently, DWAC holds a 21.3% tilt toward coffee, 20.9% cotton, 20.3% sugar, 19.4% silver and 18.1% zinc. The portfolio will be rebalanced on a monthly basis.
The Fundamental Commodity Strategy ETF is based on Research Affiliates’ fundamental research and will try to outperform the Dow Jones RAFI Commodity Index. Specifically, RCOM is designed to be a fundamental factor-weighted, broad-market commodity strategy with a modified dynamic roll to diminish the negative effects of contango in the futures market – contango refers to the effect where later-dated futures contracts are more expensive than near-term contracts.
“Much is made of smart beta strategies within equities and increasingly bonds,” Rob Arnott, Chairman and Chief Executive Officer of Research Affiliates, said in a press release. “The need for smart beta strategies within broad commodities, however, has largely been overlooked. We believe commodities can be a powerful inflation hedge and diversifier. Commodities can also offer excellent long-term return potential, especially from current levels, especially if the index rebalances against fads and bubbles.”
RCOM’s current holdings include soybeans 18.9%, gold 13.3%, copper 12.0%, WTI crude oil 7.0%, Brent crude oil 5.5%, silver 4.9%, sugar 4.7%, aluminum 4.7%, natural gas 3.7% and zinc 3.4%. The portfolio is rebalanced on a monthly basis.
For more information on new fund products, visit our new ETFs category.