Commodities: Disrupted Demand, Disrupted Supply, Continued Opportunities
While commodities may have rounded out diversified portfolios, they are becoming even more prominent as we begin to emerge from the global COVID-19 pandemic. In this webcast, Robert Minter and Stan Kiang from Aberdeen Standard Investments will discuss why commodities can be a critical component of a well-balanced investment portfolio.
Topics will include:
- Key factors for investing in commodities
- How high fees can derail the goals of commodities investors
- The importance of transparent and rules-based commodity exposure
NOT accepted for one hour of CFP/CIMA CE credit for live and on-demand attendees
CFA Institute members are encouraged to self-document their continuing professional development activities in their online CE tracker.
Robert Minter, CFA, CMT, CAIADirector of ETF Investment Strategy
Aberdeen Standard Investments
Stan KiangDirector of Strategic Accounts
Aberdeen Standard Investments
Dave NadigCIO, Director of Research
ETF Trends and ETF Database
An investor should consider the investment objectives, risks, charges and expenses of the ETFs carefully before investing. To obtain a prospectus containing this and other important information, call 844-ETFS-BUY (844-383-7289) or visit www.aberdeenstandardetfs.us. Read the prospectus carefully before investing.
Fund Risk: There are risks associated with investing including possible loss of principal. Commodities generally are volatile and are not suitable for all investors. There can be no assurance that the Fund’s investment objective will be met at any time. The commodities markets and the prices of various commodities may fluctuate widely based on a variety of factors. Because the Fund’s performance is linked to the performance of highly volatile commodities, investors should consider purchasing shares of the Fund only as part of an overall diversified portfolio and should be willing to assume the risks of potentially significant fluctuations in the value of the Fund.
Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. The Fund’s return may not match the return of the index.
Through holding of futures, options and options on futures contracts, the Fund may be exposed to (i) losses from margin deposits in the case of bankruptcy of the relevant broker, and (ii) a risk that the relevant position cannot be close out when required at its fundamental value. In pursuing its investment strategy, particularly when rolling futures contracts, the Fund may engage in frequent trading of its portfolio of securities, resulting in a high portfolio turnover rate.
As a “non-diversified” fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of Shares may be more volatile than the values of shares of more diversified funds.
During situations where the cost of any futures contracts for delivery on dates further in the future is higher than those for delivery closer in time, the value of the Fund holding such contracts will decrease over time unless the spot price of that contract increases by the same rate as the rate of the variation in the price of the futures contract. The rate of variation could be quite significant and last for an indeterminate period of time, reducing the value of the Fund.
Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Subsidiary to operate as intended and could negatively affect the Fund and its shareholders.
To the extent the Fund is exposed directly or indirectly to leverage (through investments in commodities futures contracts) the value of that Fund may be more volatile than if no leverage were present.
In order to qualify for the favorable U.S. federal income tax treatment accorded to a regulated investment company (“RIC”), the Fund must derive at least 90% of its gross income in each taxable year from certain categories of income (“qualifying income”) and must satisfy certain asset diversification requirements. Certain of the Fund’s investments will not generate income that is qualifying income. The Fund intends to hold such commodity-related investments indirectly, through the Subsidiary. The Fund believes that income from the Subsidiary will be qualifying income because it expects that the Subsidiary will make annual distributions of its earnings and profits. However, there can be no certainty in this regard, as the Fund has not sought or received an opinion of counsel confirming that the Subsidiary’s operations and resulting distributions would produce qualifying income for the Fund. If the Fund were to fail to meet the qualifying income test or asset diversification requirements and fail to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions to its shareholders would not be deductible by the Fund in computing its taxable income.
Diversification does not eliminate the risk of experiencing investment losses. Transparency refers to investor access to financial information such as price, market position and audited financial reports.
Investing involves risk, including the loss of principle. Brokerage commissions may apply and would reduce returns.
Investors buy and sell shares on a secondary market (i.e., not directly from trust). Only market makers or “authorized participants” may trade directly with the fund, typically in blocks of 50k to 100k shares.
Please see the current prospectus at www.aberdeenstandardetfs.us for more information regarding the risk associated with an investment in the Funds.
Stan Kiang is a registered representative of ALPS Distributors, Inc.
ALPS Distributors, Inc. is the distributor for the Aberdeen Standard Investments ETFs. ALPS is not affiliated with Aberdeen Standard Investments.
Aberdeen Standard Bloomberg All Commodity Strategy K-1 Free ETF (BCI) – Factsheet, Prospectus
Aberdeen Standard Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD) – Factsheet, Prospectus