ETF Trends
ETF Trends

When considering options to help protect against inflation or diversify a portfolio in an ongoing bull market environment where traditional assets are trading at loftier valuations, investors may consider alternative investments like commodities exchange traded funds.

On the upcoming webcast (available for CE Credit), What You Should Know About Commodities Now, William Rhind, Founder and CEO of GraniteShares ETFs, and Aaron Gilman, Chief Investment Officer of Independent Financial Partners (IFP), will outline the benefits of commodities exposure and discuss a low-cost strategy with a superior product structure to help diversify a traditional investment portfolio.

For example, the recently launched actively managed GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (COMB) and GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF (COMG), are benchmarked to the Bloomberg Commodity Index and S&P GSCI Index, respectively. The funds are structured as 1940 Act funds, do not issue K-1s, and are two of the lowest cost broad commodity ETFs in the U.S. market with total fund operating expenses of 0.25% and 0.35%, respectively.

The GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF provides exposure to aluminum, coffee, copper, corn, cotton, crude oil (WTI and Brent), gold, ULS Diesel, lean hogs, live cattle, natural gas, nickel, silver, soybean meal, soybean oil, soybeans, sugar, unleaded gas, wheat (Chicago and KC HRW), and zinc.

The GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF provides exposure to crude oil (WTI and Brent), corn, live cattle, wheat (Chicago and Kansas), heating oil, gas, oil, gold, copper, RBOB gasoline, soybeans, natural gas, aluminum, lean hogs, sugar, cotton, feeder cattle, coffee, zinc, lead, nickel, cocoa and silver.

Related: GraniteShares Hits Scene to Disrupt ETF Landscape

When comparing the two options, COMB includes a much grater tilt toward agriculture and underweights energy while COMG includes over 50% exposure toward energy.

The funds are called “No K-1” because they are designed to operate differently than commodity-based exchange traded funds that distribute the troublesome “Schedule K-1” to shareholders come tax season. The ETFs are designed to be taxed like a conventional mutual fund and therefore will deliver a “Form 1099” to investors. To deliver 1099s consistent with applicable tax law, the ETFs invest in an underlying subsidiary.

Financial advisors who are interested in learning more about the commodities market can register for the Thursday, August 3 webcast here.