Commodities have been receiving renewed attention this year. Fortunately, exchange traded funds make this asset class more accessible to a wider array of investors. The Direxion Auspice Broad Commodity Strategy ETF (NYSEArca: COM) takes an active approach to commodities investing.
The Direxion Auspice Broad Commodity Strategy ETF, which is nearly a year old, is actively managed and looks to provide total return that exceeds that of the Auspice Broad Commodity Index over a complete market cycle.
The 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.
“Commodities are currently the cheapest they have been relative to the S+P 500 within the last 50 years,” according to Direxion research. “One can make the case that an investment in Commodities might be timely when considering both where they are currently valued, as well as to their historic averages.”
Commodities in COM’s index may include soybeans, corn, wheat, cotton, sugar, crude oil, natural gas, gasoline, heating oil, copper, gold and silver.