With BCI offered at 25 basis points, it also offers a cost-effective solution to providing investors with exposure to commodities. Additionally, there are no K-1 tax documents issued, which is a requirement for investments in partnership interests.
“We were also the first to offer this exposure without the traditional shortcomings of what we used to see in traditional ETF commodity products, such as high fees,” said Kiang.
“The new benchmark exposure, the low cost and the tax efficiency were three big hurdles we addressed with that product (BCI),” added Kiang.
BCI will generally seek to hold similar interests to those included in the index and will seek exposure to many of the commodities included in the index under the same futures rolling schedule as the index. Additionally, BCI will also hold short-term fixed-income securities.
For more market trends, visit ETF Trends.