An Active Broad Commodity ETF to Navigate Changing Markets

Direxion Investments has come out with an actively managed broad commodities-based exchange traded fund to diversify a traditional portfolio, especially in the period ahead with rising inflationary pressures.

On Thursday, Direxion rolled out the actively managed Direxion Auspice Broad Commodity Strategy ETF (NYSEArca: COM). COM has a 0.70% expense ratio.

The new actively managed commodity ETF will try to provide total return that exceeds that of the Auspice Broad Commodity Index over a complete market cycle. The portfolio will be managed by Rafferty investment team’s Paul Brigandi and Tony Ng.

COM will maintain a portfolio similar to those included int he index through exchange traded commodity futures contracts, swap contracts and investments in other investment companies or exchange traded notes to obtain exposure to the commodities market.

The underlying Auspice Broad Commodity Index is a rules-based index that utilizes a quantitative methodology to track a diversified portfolio of 12 commodity futures contracts dependent on the historical volatility of that component and the total index value and is independent of the volatility and position of other components. Each holding is then positioned either long or flat, depending on prevailing price trends.

The 12 commodities that comprise the index may include soybeans, corn, wheat, cotton, sugar, crude oil, natural gas, gasoline, heating oil, copper, gold and silver.