ETF’s have increased significantly in popularity during the last twelve months. To give you some perspective Betashares Capital, one of Australia’s largest ETF’s firms has seen the expansion of funds under management increase from $10 billion in 2020 to more than $17 billion current at April 2021. ETF’s can be a great way for new investors to get their foot in the door and gain a sense of what is involved with investing in shares.
After the recent covid-19 economic downturn most economies are in their recovery phase and heading towards a “new-normal” which will see a demand for commodities. However, the cost of these supplies could see a rise in price due to demand and inflation caused by macroeconomic trends and the recent stimulus efforts held by many governments in order to keep economies afloat during the recession.
This ETF is highly popular due to it’s ability to address challenges associated with access this asset class for exchange traded funds. It offers diversity being a commodity fund that gives investors access to more than a dozen of the most commonly traded materials on earth. This fund is another that uses diversification to maintain buoyancy it also is knows for it’s “dynamic roll” strategy.
Which means short term contracts are rolled into longer term contracts, so although the fund doesn’t actual own the fossil fuel or materials company it invests in, when investing in the futures of the specified commodity company’s the price difference in the short term compared to the long term contracts will then determine the profit or loss arrived at in the “dynamic roll” strategy.
I know you will investigate on your own the commodity funds that focus on gold, oil and silver predominantly. how about I present to you a fund that is dedicated to agricultural commodity markets. It is comparatively smaller than the other commodity funds discussed earlier having approximately $225 million held in assets. CORN could be the new traders introduction to direct exposure in agricultural commodities