WisdomTree launches new currency-hedged share class for WisdomTree Enhanced Commodity UCITS ETF
Monday 16th December '19
WisdomTree, the exchange traded fund ("ETF") and exchange traded product ("ETP") sponsor, today announced it has broadened its product range and listed a CHF-hedged version of the WisdomTree Enhanced Commodity UCITS ETF (“the fund”) on SIX Swiss Exchange.
The hedged share classes of the Fund will provide exposure to enhanced broad commodities while providing greater investor protection against the impact of adverse currency movements. The Fund also uses an innovative dynamic roll process, with a view to minimising roll costs in contango, and to maximising roll return in backwardation, ultimately aiming to reduce the long term costs of holding commodity exposures.
Net flows into European domiciled commodity ETPs globally stand at US$8.5 billion year to date, and gaining exposure to commodities has become an increasingly important feature in the investment landscape, as investors become more aware of the importance of raw materials in supporting global economic growth.
Christopher Gannatti, Head of Research for WisdomTree in Europe said, “We are seeing greater demand from investors for broad exposure to this asset class as understanding of its uncorrelated risk contribution has increased. Commodity ETPs have seen strong flows this year, and we expect investor interest in broad commodities to continue growing, underpinned in particular by the diversification and volatility-reducing benefits on offer as diversified broad commodity exposure can help to mitigate specific risks associated with single commodities.”
Contango: Occurs when the current spot price of a commodity is lower than the forward price
Backwardation: Occurs when the current spot price of a commodity is higher than the forward price
Roll: Occurs when a futures contract is switched from the front month contract that is close to expiration to another contract in a further-out month
TER: Total Expense Ratio